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, February 23, 2021

Strategic CSR - Bill Gates

You may have seen some of the media interviews Bill Gates has been doing recently to promote his new book, How to Avoid a Climate Disaster:

"How to Avoid a Climate Disaster details the transformation necessary to reverse the effects of decades of catastrophic practices. We need, Gates calculates, to remove 51bn tonnes of greenhouse gases from the atmosphere every year. Failing to do so would cost more than the 1.5 million lives already lost to Covid-19 and could cause, he calculates, five times more deaths than the Spanish flu a century ago."

The article in the url below sums up the book and the coverage he has been getting pretty well, as well as highlighting the limits to Gates' argument. In short, the article makes clear that the constraints we face are not technical or scientific, but human:

"… we have to ask why, when what needs to be done seems obvious, we have been so slow to act. And why … has the world simply failed to come together?"

The solutions Gates provides in the book are, for the most part, technical. But, because the problem we face is essentially a human one, then it is a human solution that we must look for:

"Seemingly unanswerable scientific evidence can be torpedoed by powerful vested interests, or sidelined by bureaucratic indifference, or undermined by weak and incompetent political leaderships that make commitments they do not honour. Or they can be sabotaged by geopolitical rivalries or simply by nations clinging to old-fashioned and absolutist views of national sovereignty. As a result, the multilateral cooperation necessary to deal with a global problem does not emerge, and the very real tensions between economic and environmental priorities, and between the developed and developing world, go unresolved."

Gates has weighed-in publicly on the world's problems before (in addition to the wonderful behind-the-scenes work done by the Bill & Melinda Gates Foundation), most notably in his 2008 Davos speech on "creative capitalism" (see Strategic CSR – Bill Gates). But, what I think Gates misses is that the world is not dominated by automaton technocrats, like himself, but is instead made up of very human individuals who make decisions for all kinds of reasons that, often, have little to do with the most rational or scientific or technical option. The article gets at that by pointing out that there are all kinds of reasons why the 'correct' decision will not be made in many/most scenarios (even when self-destruction is a viable option). This quote in the article struck me as being the core of the problem (and what Gates doesn't seem to see):

"Taken together these [technical] measures could meet the world's objective of net carbon zero. But if politics was simply the application of reason and science to contemporary challenges, we might have not only solved the climate crisis by now but easily cured Covid-19 and other infectious diseases too."

In other words, the article highlights the limits of technology in a world dominated by human decision making. But, unfortunately, having identified this very real barrier to progress, the author of the article (who was Prime Minister of the UK from 2007 to 2010) then falls into exactly the same trap he accuses Gates of falling into. Rather than proposing a set of technological and scientific solutions, he proposes a purely political set of solutions, but fails to address the much stronger forces that are set against radical change:

"But to operationalise the Paris agreement – to limit warming to 1.5 degrees – requires countries to halve their CO2 emissions by 2030. So vested interests like big oil will have to be enlisted for change. The populist nationalist and protectionist rhetoric of irresponsible demagogues will have to be taken head on. And supporters of a stronger set of commitments will have to show why sharing sovereignty is in every nation's self-interest, and that coordinated global action is indeed the only way to end the mismatch between the scale of the environmental problems we face and our current capacity to solve them. Success will come by demonstrating that the real power countries can wield to create a better world is not the power they can exercise over others but the power they can exercise with others."

Yes, identifying the end result is easy, and asking for the world to cooperate is logical. What is much harder is explaining exactly how each of these valid goals will be achieved in a human world. One reason why firms do not develop more meaningful sustainability policies is that key stakeholders are unwilling to support the implementation of such policies, especially in terms of paying the accompanying costs. Similarly, of course, a major reason why politicians do not advocate for more radical sustainability laws is that many voters will not vote for them. The most ridiculous argument I have seen made against a carbon tax is that it will push up prices for fuel and electricity. Yes, that is exactly the point. It is supposed to push up prices because that is how we reduce consumption. But, that does not mean that voters are willing to pay those higher prices. And, if they are not willing to pay them, then they are unlikely to vote for the politicians who proposed them. Hence, no carbon tax.

Until we, collectively, agree we are willing to pay the costs associated with switching to a more sustainable lifestyle, I do not see how we can move fast enough to make the changes that need to be made.

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 to Avoid a Climate Disaster by Bill Gates review – why science isn't enough
By Gordon Brown
February 17, 2021
The Guardian 

Thursday, February 18, 2021

Strategic CSR - Pink tax

The article in the url below caught my eye because of the enlightened approach to women's healthcare (and associated issues around poverty) that the Scottish government is demonstrating:

"On Nov. 24, Scotland became the first country in the world to establish through legislation that access to period products is a right, a move that First Minister Nicola Sturgeon described as groundbreaking. It caps a four-year campaign backed by a wide coalition of trade unions, women's groups, and charities and led by Monica Lennon, a member of the Scottish Parliament."

As the title of the article suggests, the issue of healthcare access in this case is secondary to the issue of poverty, which acts as a barrier to that access:

"The aim, Lennon says, is to eradicate 'period poverty'—the cost of the products can be prohibitive—and end the stigma around menstruation."

Some more detail about the legislation:

"Under The Period Products (Free Provision) (Scotland) Act, approved unanimously in the Scottish Parliament, local governments will be required to make free supplies available in public buildings such as libraries and recreation centers to anyone who wants them. (Schools, colleges, and universities in Scotland have offered free products since 2018, and the legislation compels them to keep doing so.) The Scottish government estimates that about 13% of people who have periods will take part in the program in its first year. That would put costs, which it will cover, at about £8.7 million ($11.6 million) for 2022-23. Full implementation of the program will take two years."

As the budget to implement the legislation indicates, without assistance the cost of these products can quickly rise:

"In the United Kingdom, the average woman spends about £4,800 on the products over her lifetime, according to a 2018 study … and that amount can be higher for people with medical conditions such as endometriosis, which can cause heavier periods. For households living on low incomes, the expense is a burden."

As a result, "period poverty" is a real issue for many women, even in developed countries:

"A survey of more than 1,000 women in Scotland, which helped galvanize support for the bill, found that a fifth had experienced period poverty at some point in their lives. Unable to afford tampons or pads, some resorted to using toilet paper or even rags. One in 10 said they prioritized buying food over the products."

In many countries, women's healthcare products are not given preferential taxing, and are sometimes taxed higher because of the stigma that is often attached to them:

"In some countries, they're even treated as luxury goods and taxed like cigarettes, alcohol, and jewelry. The 2020 tax rate on menstrual products was 27% in Hungary, 25% in Sweden, and 16% in Mexico. In the U.S., 30 states levy a sales tax on tampons and pads, according to the advocacy group Period Equity, and they can't be purchased with food stamps."

Such taxes are considered discriminatory by activists due to the fact that they are not applied equally throughout the population:

"A handful of countries have scrapped the tax. The first was Kenya in 2004, and others that followed include Australia, Canada, Ireland, and from January, the U.K., where 'the tampon tax' became so controversial that major supermarkets started covering the cost of it themselves in 2017."

Many of these points are related to the larger issue of a pink tax, which is defined by Wikipedia as follows:

"The pink tax is a phenomenon often attributed as a form of gender-based price discrimination, with the name stemming from the observation that many of the affected products are pink. This is sometimes but not always a literal tax. Regardless of whether tax policies of state or federal governments are involved, there is a broad tendency for products marketed specifically toward women to be more expensive than those marketed for men, despite either gender's choice to purchase either product. The NYC Department of Consumer Affairs conducted a study that concludes that women's products are typically more expensive than men's (in New York city) without reasonable cause. There are many causes of this discrepancy, including the tampon taxproduct differentiation, and the belief that women are less price elastic than men."

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/


Scotland Takes Aim at 'Period Poverty' by Making Products Free
By Caroline Alexander
November 30, 2020
Bloomberg CityLab
 

Tuesday, February 16, 2021

Strategic CSR - Climate transparency

The article in the url below reports on efforts by the UK government to increase its oversight of companies' sustainability efforts:

"The U.K. said that companies need to report the financial impacts of climate change on their businesses within the next five years, becoming the first country to make the disclosures mandatory as investors and governments demand corporations curb their greenhouse gas emissions."

Although this may seem obvious, it is actually an important step forward:

"Chancellor of the Exchequer Rishi Sunak, the country's equivalent to a U.S. Treasury secretary, said Monday that the rule would apply to most of the nation's economy, including listed companies, banks, large private businesses, insurers, asset managers and regulated pension funds."

This policy came directly from the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD, https://www.fsb-tcfd.org/, Chair Michael Bloomberg), an organization that was established in 2015 "to promote more informed decisions by companies":

"The TCFD says companies should disclose in their financial reports how climate change could increase or reduce sales, among other issues. As of this year, more than 1,500 organizations have expressed their support for the TCFD's recommendations, a more than 85% increase from last year, according to the TCFD's status report published late last month. The report said 42% of companies with a market capitalization above $10 billion disclosed at least some information in line with the TCFD."

The work of the TCFD is global, with implications for regulatory systems far beyond the UK:

"Investment houses that offer environmental funds welcomed the U.K.'s adoption of the TCFD. … The U.K.'s move comes as regulators in the U.S. have voiced support for the TCFD. Last month, Linda Lacewell, superintendent of the New York State Department of Financial Services, recommended that banks and insurers report through the TCFD. The DFS regulates around 1,500 banks, 1,800 insurers and other financial groups, with assets exceeding $7 trillion."

Together with the UK, other countries in the EU are moving further and faster than most:

"Like the European Union it recently exited, the U.K. has a net-zero emissions goal by 2050. To help meet that goal, Mr. Sunak also said the country would issue its first green bond next year under its new climate change agenda, following its European peers. Money raised by issuing a green bond is earmarked for climate and environmental projects. In early September, Germany raised 6.5 billion euros ($7.12 billion) via its debut green bond. The eurozone's green sovereign bond market, which the U.K. isn't part of, is still relatively small at less than around 1% of the region's overall bond market, but it is expanding since France's first green bond in January 2017."

There is additional reporting on this issue in the article in the second url below:

"The TFCD standards, to which the U.K. decision will lend weight, cover four main areas: governance, risk management, strategy and key metrics. While the disclosures are largely qualitative, their publication would likely push companies to incorporate climate risks into the financial numbers too. Big entities will need to comply first, followed by smaller ones over five years. By 2022, the U.K. government expects climate-risk reporting from all companies listed on the main market of the London Stock Exchange (excluding a high-growth submarket), half of its large private companies, 75% of U.K.-authorized asset managers and nearly all of its banks, insurers and large pension funds."

Most notably, the UK government felt compelled to intervene formally because previous efforts at voluntary compliance were not working:

"Progress on voluntary disclosure has been slow, even though over 1,500 companies and organizations 'support' [greater transparency on this issue]."

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/


U.K. Requires Companies to Report on Climate Change by 2025
By Dieter Holger and Emese Bartha
November 9, 2020
The Wall Street Journal

U.K. Tries Climate Reports
By Rochelle Toplensky
November 18, 2020
The Wall Street Journal
Late Edition – Final
B14
 

Thursday, February 11, 2021

Strategic CSR - $15 minimum wage

There is an interesting debate going on in the U.S. at the moment about whether the federal government should raise the national minimum wage to $15 per hour. My understanding of the large body of economics research on the effects of raising the minimum wage is that, overall, it is a wash – small, incremental increases essentially have little to no effect on jobs. The implication, however, is that a significant increase will have a more consequential impact. This position seems to be supported by the article in the url below, which frames the debate in terms of the effects of a raise on the national deficit:

"Raising the federal minimum wage to $15 an hour — a proposal included in the package of relief measures being pushed by President Biden — would add $54 billion to the budget deficit over the next decade, the Congressional Budget Office concluded on Monday."

Putting aside the $54 billion price tag (which is relatively small in an overall package priced at $1.9 trillion), what is more interesting, I think, is the tradeoff between standard of living (for those who receive the wage increase) and job opportunities (for those who are not hired due to the higher costs for employers). The CBO also addresses this tradeoff in its report and, in the process, raises the moral stakes of the political vote:

"Progressives see the wage increase as a central weapon for fighting poverty and inequality, while conservatives often warn it will reduce jobs. The report in essence said both sides were right. It found a $15 minimum wage would offer raises to 27 million people and lift 900,000 people above the poverty line, but it would also cost 1.4 million jobs."

So, if we accept these predictions as largely accurate (and the Congressional Budget Office is apolitical), then is that a reasonable tradeoff to make? Is it worth costing 1.4 million people the opportunity to work in order to give a meaningful increase in the standard of living of 27,000,000 people, 900,000 of whom would be rescued from poverty? For many, that is any easy choice; for many others, it is more challenging. Hence, the political stalemate.

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/


$15 Minimum Wage Would Cut Poverty and 1.4 Million Jobs
By Jason DeParle
February 9, 2021
The New York Times
Late Edition – Final
B5

Tuesday, February 9, 2021

Strategic CSR - CDs

In Strategic CSR, a large part of Chapter 11 is dedicated to a discussion around waste, looking at the consequences of our convenient, high-tech lifestyle from the perspective of the amount of plastic and e-waste that we generate and throw away. The article in the url below adds to that growing pile of detritus, and the sense that we don't know how to deal with it, by highlighting the challenges of recycling old CDs:

"The CD recycling process [involves the discs being] … granulated into raw polycarbonate plastic, resulting in a white and clear powdery material that glints and resembles large snowflake crystals stuck together."

Why is the recycling of CDs important?

"The material, which takes one million years to decompose in a landfill, can eventually be used to mold durable items for cars, home building materials and eyeglasses. But that's assuming anybody buys the raw material."

But, as we know with the markets for several recycled materials, those buyers have disappeared in recent years, and especially since China stopped being willing to act as the recycler of last resort for the rest of the world:

"The polycarbonate granules used to be sold mostly to China, where the United States sent the bulk of its recycling until 2018 before China restricted imports of mixed paper and most plastic. The price that China was willing to pay per pound of granulated polycarbonate began to dip in 2008, … and by 2011 it had plummeted."

In addition to highlighting the importance of recycling CDs, and also spelling out how difficult it is, the article looks at how the CD became such an important part of our lives:

"CDs may seem like a relic, but when they entered consumer homes in the 1980s, they were a revelation in information sharing. 'In the early '80s, information storage was mainly in magnetic tape and magnetic devices,' said Kees Immink, who was one of eight engineers to create the CD in 1979. 'The CD was groundbreaking.'"

Of course, it was the shift from vinyl to CDs that led to this growth:

"CDs became ubiquitous: In the 1990s, AOL sent them to potential internet subscribers. In the mid-'90s, makers of video games began to shift away from cartridges and toward discs. By 2000, more than 900 million music CDs were sold, a record number that was never surpassed again, according to the Recording Industry Association of America. (Eminem, Destiny's Child and Britney Spears were all top sellers.) And then, just a year later, Apple released the first iPod, which allowed users to carry 1,000 CD-quality songs in a six-ounce device in their pocket."

But, in the U.S. at least, it wasn't playing music that caused the rapid expansion of the number of CDs produced, but the emergence of the internet:

"In a recent interview, Janice Brandt, a former senior consultant at AOL and the marketing guru behind the company's 1990s campaign that produced millions of CDs for potential customers, reflected on how much has changed, technologically, in just a few decades. The AOL campaign, which at one point in the late 1990s had a budget of $750 million, was a huge moneymaker for AOL that brought millions of new users to the internet. Ms. Brandt said she thought that probably every other CD in existence is an AOL CD."

For now, however, CDs continue to be replaced by other, more efficient storage technologies:

"This month brings another small blow to CDs as Sony and Microsoft are releasing the latest editions of their game consoles, the PlayStation 5 and the Xbox Series X, without disc drives."

Even though CDs are not as omnipresent as they once were, there are still hundreds of millions of them out there and, at some point, something has to be done with them:

"In a global sense, recycling CDs is not a big environmental priority right now, according to Judith Enck, a former E.P.A. regional administrator, who founded Beyond Plastics, an anti-plastic project based at Bennington College in Vermont. … 'You look at other materials, like cardboard and glass and aluminum, and that's all included in curbside recycling programs because there are businesses that will buy all of that for a reliable market,' Ms. Enck said. 'There just aren't markets for this type of plastic.' So, for now, old CDs languish in basement or attics, or just end up with other plastics -- in the trash."

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/


The Uneasy Afterlife of Our Dazzling Trash
By Sandra E. Garcia
November 7, 2020
The New York Times

Thursday, February 4, 2021

Strategic CSR - Bubbles

The article in the url below draws a fascinating distinction between investment bubbles that are "hugely destructive" and those that are "socially useful." While the housing bubble that led to the financial crisis a decade ago falls into the former category, the current inflated stock price of Tesla and associated bubble around green energy are (according to the author) examples of the latter category:

"Whether investors one day regret paying so much for Tesla Inc. stock, they have done the planet a favor. Their enthusiasm enabled the company to raise enough money to stay afloat until it could profitably mass produce electric cars while accelerating other manufacturers' rollouts."

The bubble these investments have created is partly due to fascination with individual personalities, such as Elon Musk (Tesla is currently "trading at more than 1,000 times trailing earnings"), but is also partly due to the increased interest with ESG funds (and the younger retail investors driving their growth). And this fascination seems to be growing, irrespective of whether the firms themselves are profitable:

"From the end of 2019 through Tuesday, a fund that tracks a Nasdaq clean energy index had risen 191% compared with the broad market's 15%. It trades at 52 times trailing earnings, nearly double the overall market's already-historically high multiple. More than a third of its 44 constituents are losing money. On Wednesday afternoon it was up 7% on expectations Democratic control of the Senate would lead to more support for renewable energy."

The rapid growth in investments flowing into these funds is apparent from the chart accompanying the article:
 

 
Although elements of these investments may be irrational, as the article notes, that does not mean the resulting bubble does not have any redeeming features:

"Stupid, however, isn't the same as useless. Some bubbles can be hugely destructive, as we saw with housing 13 years ago. Others are socially useful. Private markets generally provide too little incentive for risky innovation because shareholders only capture a small part of an innovation's benefit; most goes to consumers (think of a life-saving drug). A bubble can overcome that market failure as investors shower capital on countless new ventures they hope will be the next Microsoft Corp. or Amgen Inc. Even as most of those ventures fail, they extend the technological frontier."

This is true of elements of the dotcom bubble around the turn of the century. Similarly, it is true of a number of unicorns in recent years, and the green energy bubble today. The competition that leads to the failure of (most) companies will also produce the (much fewer) success stories that define the future:

"In the late 1990s and early 2000s, investors snapped up the stocks and bonds of money-losing technology, media and telecom companies. The mania financed a glut of fiber optic that drove the price of bandwidth down enough to bankrupt many telecom companies while allowing countless new businesses to emerge. It also enabled Amazon.com Inc. to raise enough money to keep growing until it had proven its business model could work. Green energy faces obstacles the dot-com boom didn't. It mostly does what fossil fuels already do—just with less carbon dioxide emissions, a benefit that accrues to the entire world rather than producers or consumers."

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/


Market Euphoria Helps Fuel Green Energy
By Greg Ip
January 7, 2021
The Wall Street Journal
Late Edition – Final
A8

Tuesday, February 2, 2021

Strategic CSR - Carbon tax

The article in the url below is a useful and clear explanation of the benefits of a carbon tax as the most effective, immediate remedy to the challenge of climate change:

"The economics of climate change is straightforward. Earth is warming both because greenhouse gases are costly to eliminate and because governments have permitted people to emit them into the atmosphere without penalty. The classical remedy is a carbon tax, a fee on the carbon content of fossil fuels. Generally levied where fuels are extracted or imported, it discourages carbon emissions by making goods with larger carbon footprints more expensive. The World Bank reports that as of 2019, 57 local, regional and national governments have either enacted some form of carbon tax or plan to do so. When people must pay for their emissions, they quickly discover creative ways to reduce them."

One of the main barriers to the implementation of a carbon tax, of course, is the lack of political will. That is, politicians fear sponsoring anything that looks like a tax, based on the reasonable assumption that their voters will vote them out of office if they do so:

"Even with such gains in prospect, many legislators remain unenthusiastic because they perceive a carbon tax as being unpopular with voters. Many families have been struggling to make ends meet, they might say, and the last thing they need is a stiff new tax on energy use."

The most commonly-prescribed solution to this problem is to make the tax revenue-neutral. That is, each person would receive a monthly rebate that is (in theory) equal to their estimated carbon usage. The problem, of course, is how to accurately measure individual usage to ensure poorer families do not end up paying more in carbon taxes than they receive in rebates. As a potential remedy, the author of this article suggests a more progressive rebate system based on the uneven carbon usage by different income groups:

"Because the wealthy consume much more energy than others, they would contribute a disproportionate share of the revenue from a carbon tax. The top 10 percent of all income recipients account for almost half of carbon emissions worldwide, an Oxfam International study has found. Use patterns are less skewed in the United States, but here, too, the wealthy live in bigger houses, drive bigger cars and, at least when the pandemic isn't raging, take many more trips to distant destinations."

So, rather than try and calculate each taxpayer's carbon usage, this article suggests that simply giving everyone the same payment would amount to a net gain for those at lower income levels:

"Even with equal rebates per capita, most people would get a monthly check for more than they'd paid that month in carbon taxes. Rebates could, of course, be distributed in a more progressive fashion."

There is even an argument that higher income earners would still be better off, even though they would be net contributors to the carbon tax system:

"Although low- and middle-income families would be net cash beneficiaries under this plan, the wealthy would pay more in tax each month than they would receive in rebates. Even so, prosperous voters would also come out ahead, on balance. That's both because they would benefit disproportionately from the resulting reductions in climate losses and because they would otherwise have to shoulder much of the tax burden of climate adaptation measures. In short, compelling evidence suggests that a carbon tax would improve life outcomes for rich and poor alike."

This twist of a progressive rebate distribution is intriguing, and something I do not remember seeing before. The result could be persuasive to politicians with the creativity to frame it appropriately to their constituents:

"Had carbon taxes been widely adopted decades ago, the planet would not be facing a climate crisis today. Critics are correct that it is too late for this measure alone to defuse the climate threat. … But adopting a carbon tax even at this late date would greatly reduce both the cost of achieving climate stability and the time needed to achieve that goal."

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/


Behavioral Contagion Could Spread Carbon Tax Benefits
By Robert H. Frank
August 23, 2020
The New York Times
Late Edition – Final
BU5

Thursday, January 28, 2021

Strategic CSR - Unilever

The article in the url below caught my eye, first because of the four day work week (at full pay), and then because it is Unilever making the announcement:

"Consumer goods giant Unilever will trial a four-day working week in New Zealand to enhance worker wellbeing and boost productivity."

Some detail:

"All 81 workers will be eligible to work for four days on full pay, New Zealand Managing Director Nick Bangs said in a statement Tuesday. Most of the staff are based at Unilever's Auckland headquarters and distribution center after the company closed manufacturing operations in 2015."

The motivation for the trial is the shift in working practices that have been accelerated by the pandemic. Unilever sees the 'old' way of working as gone, so plans to use the opportunity to try something new. What is interesting is that most of these kind of stories that I have seen recently tend to involve IT/Silicon Valley-type companies. Much less common to see manufacturing/consumer product companies being similarly adventurous:

"The trial, which starts this month and will run for a year, is limited to New Zealand at this stage. Unilever will work with Sydney's University of Technology Business School to measure results, and will explore the possibility of what it could mean on a broader scale. The company employs 150,000 people worldwide."

As the NZ director makes clear, this is solely a business decision:

"'Maintaining competitive edge, increasing productivity and improving wellbeing sit at the heart of the four-day week,' [he] said. 'This is about removing the barriers that limit value creation and slow us down.'"

There are a few companies that are implementing something close to the Strategic CSR framework (e.g., Salesforce and Nike), but Unilever is the company that seems to get it the most. At least, they did under Paul Polman (who retired in December 2018). I presume they are continuing his managerial ethos, although I haven't heard much from them of late, which is another reason why I was pleased to see this announcement. The research on employee productivity has been pretty conclusive for a while now (see Strategic CSR – Microsoft and Strategic CSR – Productivity), but it is good to see a company as large as Unilever taking the risk. Being a manager is incredibly difficult, but the research shows that a focus on intrinsic (rather than extrinsic) motivation is the key to getting the most out of your employees, while providing them with meaning and purpose in what they do. Unilever has been in this space for a while now. It is not rocket science, but that doesn't mean it is widely practiced.

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 to Trial Four-day Working Week in New Zealand
By Tracy Withers
November 30, 2020
Bloomberg Businessweek

Tuesday, January 26, 2021

Strategic CSR - Welcome back!

 
Welcome back to the Strategic CSR Newsletter!
The first newsletter of the Spring semester is below.
As always, your comments and ideas are welcome.
 

With all the barriers that have cropped up to impede the efficient distribution of the COVID-19 vaccine, the article in the url below discusses one that would not immediately have occurred to me—whether the "shots are halal":

"A vaccine laced with the smallest amount of pork DNA could dissuade some followers of Islam from inoculation in Indonesia, the country with the world's largest Muslim population."

In Indonesia, which has the world's fourth largest population (in addition to the largest Muslim population), the lack of transparency on the vaccine's ingredients is a significant barrier to widespread inoculation:

"With the highest number of coronavirus infections in Southeast Asia, [Indonesia] is eager to drum up support for its goal of inoculating 181.5 million adults within 15 months. But looming questions about the safety of the Sinovac vaccine and whether it is halal, or allowed under Islam, are complicating the government's efforts."

For those who will not receive a vaccination that has not been approved by religious clerics, assurances from pharmaceutical companies are insufficient:

"The vaccine must also undergo a separate approval process by the Ulema Council, an influential group of Muslim clerics that decides which products are halal in Indonesia. … The Ulema Council is expected to issue a decree, or fatwa, authorizing the use of the [approved] vaccine in the coming weeks, but the nature of its findings could affect how widely it is accepted in Indonesia, especially among the country's many conservative Muslims."

This, in spite of assurances from other Islamic countries:

"Islamic authorities in other countries where Muslims make up a sizable share of the population, including Malaysia and the United Arab Emirates, have already ruled that coronavirus vaccines are permissible, even if they contain pork gelatin, which is used to stabilize many inoculations."

And, such moral concerns are not restricted to Islam:

"Last month, the Vatican released a statement declaring coronavirus vaccines 'morally acceptable' for Catholics who might be opposed to a vaccine developed with stem cells from fetuses aborted decades ago."

The concerns are real and, if the findings of the Ulema Council are not sufficiently convincing, the implications could be serious:

"During a measles outbreak in 2018, the government, backed by the World Health Organization, undertook an ambitious vaccination program, but the only vaccine available in sufficient quantities contained pig products. After analyzing the measles vaccine, the Ulema Council declared it haram, or forbidden under Islam, but said its use was allowed because the outbreak was an emergency. In some parts of the country, however, local Muslim leaders opposed using a haram vaccine. The program fell well short of its 95 percent target and ended with nearly 10 million children unvaccinated."

Hope you all have a good semester.
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/


Muslims in Indonesia Ask if Shots are Halal
By Richard C. Paddock
January 6, 2021
The New York Times
Late Edition – Final
A8
 

Tuesday, December 1, 2020

Strategic CSR - Chocolate

 
This is the last CSR Newsletter of the Fall semester.
Happy Holidays and I will see you in the New Year!


We know we are finally getting serious about obesity and related health issues when we raise the prospect of taxing chocolate:

"In the U.K.—where people eat more chocolate per head than anywhere but Russia—a government report shows the industry has made little progress toward a 2020 deadline to cut sugar. That has prompted health campaigners to call for a tax on chocolate similar to a levy on sugary soft drinks, which in several countries has reduced consumption or propelled reformulation."

The possibility of regulation has arisen due to long-standing efforts by confectionary makers to reduce the amount of sugar in their products that initially made progress, but have recently stalled:

"Four years ago, England's public-health agency said it wanted the food industry to help reduce obesity by voluntarily reducing overall sugar by 20% between 2015 and 2020 in products including chocolate, breakfast cereal, yogurt, spreads and desserts. But a report published by the agency last month showed sugar reduction of 3% in 2019 from 2015 levels. Chocolate lagged behind other foods, with retailers and branded manufacturers cutting sugar by 0.4% per 100 grams over the past five years. The out-of-home sector, which includes coffee chains and sandwich shops, reported a 10.7% rise in sugar content per 100 grams of chocolate over the same period."

This approach of taxation has worked with other unhealthy foods and drinks, so no reason not to think it could also work with chocolate:

"The burgeoning scrutiny presents new risks and challenges for global chocolate companies such as KitKat maker Nestlé SA and Toblerone-owner Mondelez International Inc., with the U.K.'s regulation on alcohol, smoking and plastic waste historically influencing policy elsewhere."

The UK is becoming increasingly strict on the ingredients in such products, as well as companies' abilities to advertise them to consumers:

"The U.K. recently began soliciting views from companies and the general public on its proposal to ban any online advertising for food and drinks high in salt, fat and sugar—including chocolate. The move would extend a ban announced this summer on advertising such foods online or on television before 9 p.m. A separate proposed ban on 'buy one, get one free' promotions for these foods could reduce U.K. sales by more than £3 billion, says research firm IRI."

But, according to the chocolate makers, sugar is an integral ingredient in their products:

"The average bar of chocolate is roughly half sugar. Reducing that amount affects texture, size and how quickly it melts. Sugar provides bulk; replacing it with artificial sweeteners—commonly used in drinks—doesn't work because their intensity means they are needed in far lower quantities. While drinks makers can top up volumes with water or juice, executives say there isn't an obvious substitute in chocolate."

Nevertheless, the appetite for regulation is growing:

"The U.S. Food and Drug Administration this year began requiring larger food companies to include an additional line for added sugar on nutrition labels. Smaller companies must comply by January. Mexico last month began requiring front-of-pack labeling describing the health hazards posed by products high in sugar, calories, salt and fat. Hershey Co. Chief Executive Michele Buck recently said the company was keeping a close eye on how consumers responded."

But, never give up hope. Luckily for us, science has been taking this issue seriously for many years and, despite the market failure of many confections containing sugar-alternatives, there is a natural substance that might offer a pathway forward:

"To slash calories as well as sugar levels, Tate & Lyle PLC is betting on allulose, a natural sugar found in figs and raisins that it is making from corn. Allulose tastes like sugar and adds bulk but passes through the body rather than breaking down into calories, said Abigail Storms, the ingredients company's head of sweeteners. The FDA recently said allulose doesn't have to be treated as a sugar or an added sugar on pack labels, and confirmed its calorie content is far lower than table sugar."

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/


Chocolate Makers Struggle to Cut Sugar
By Saabira Chaudhuri
November 23, 2020
The Wall Street Journal
Late Edition – Final
B1
 

Wednesday, November 25, 2020

Strategic CSR - Paper

As the article in the url below notes, it appears that one upside to the COVID-19 lockdown is the revival of the recycling market, at least for paper and cardboard:

"Junk mail and discarded delivery boxes have turned into a hot commodity as the paper industry uses them as a substitute for recycled office paper, which became scarce as people work from home."

This is a marked improvement on most of the articles I have read about recycling over the past couple of years – ever since China stopped being willing to take our waste (see Strategic CSR – Recycling). Now, instead of worrying where to ship our recycling and avoid throwing it in the landfill (e.g., Strategic CSR – Recycling):

"U.S. paper and cardboard mills are figuring out how to turn that trash into new toilet paper, coffee cups, paper towels and cardboard boxes. And they have more material to work with as people order more food and packages to their homes during the coronavirus."

It seems that the underlying reason is there is now an increased supply of waste paper caused by our sudden increase in online shopping. But, it is not simply a case of greater volume, but more that the increased volume has affected the ratio of clean to dirty waste that is ending up in the paper recycling bin:

"Many U.S. mills long avoided paper from curbside recycling programs. The low quality of paper mixed with glass, cans and household trash made it difficult to turn into new paper and cardboard. … But better screening for contaminants and the rising share of e-commerce delivery boxes in recycling bins have made that mixed paper more attractive, operators say."

It seems that the increased percentage of Amazon boxes is more than making-up for the lack of paper we are recycling at the office while "most office workers stay home." And, as we might expect, if there are sufficient market indicators as encouragement, for-profit firms are responding with investment, which should produce greater efficiencies and even more reasons to increase the amount of waste that is recycled:

"Georgia Pacific, whose consumer brands include Dixie cups, Brawny paper towels and Quilted Northern toilet paper, invested about $45 million at mills in Green Bay, Wis., and Muskogee, Okla., in recent years to produce pulp that contains more paper recovered from recycling programs, including coffee cups. Fine screens were added to pulping equipment at the plants to filter out the polyethylene plastic films inside coffee cups that prevent them from leaking but also make them harder to turn into pulp."

In short, the market is working as it should. Firms will do what we ask (i.e., incentivize) them to do:

"The overall collection volume from U.S. residential recycling programs is up at least 7% from last year at this time, thanks in part to the mountain of delivery boxes piling up on doorsteps, according to the Solid Waste Association of North America. 'We're more than happy to see it. We've said this is valuable material,' said Brent Bell, vice president of recycling for Houston-based Waste Management Inc., the nation's largest trash collector."

Happy Thanksgiving everyone!
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/


Delivery Boxes Bring New Life to Recycling
By Bob Tita
November 18, 2020
The Wall Street Journal
Late Edition – Final
B1, B5

Monday, November 23, 2020

Strategic CSR - Free speech (II)

One of last week's newsletters focused on the issue of free speech (Strategic CSR – Free speech). The article in the url below expands on this argument, demonstrating some of the challenges (and collateral damage) of entrusting for-profit firms with the task of defining the parameters of acceptable content that is allowed to be disseminated via their platforms:

"What do a small business that sell socks packaged by homeless youth and a start-up that makes bracelets from life vests once worn by refugees have to do with the spread of misinformation during the presidential election season? Nothing, thought the entrepreneurs who started them, until Facebook notified them that their ads had been pulled because they fell into a category of 'social issues, elections or politics' that were being blocked by the site."

The challenges of separating right from wrong are particularly stark when the effort to define them is systematic – in other words when it is algorithmic, which necessarily generalizes about topics that, in reality, are extremely nuanced:

"The social media giant announced last week that it was extending a ban imposed on certain ads during the election to prevent the dissemination of false information. The prohibition has ensnared a number of socially driven businesses with no direct connection to partisan politics. Companies connected to issues like hunger, the environment and immigration, many of which rely heavily on social media to draw customers to their websites, have seen their access abruptly cut off."

The trouble is that, in writing algorithms (as in using data to predict any outcome), the prediction is only as good as the data available. In other words, the resulting algorithm can only account for what has happened before when predicting what might happen in the future. This conservative approach necessarily entails generalizations that lead to unintended consequences:

"In the run-up to the 2016 election, deceptive and distorted information spread by Russian automated accounts and others on social media platforms like Facebook, Instagram and YouTube was designed to influence voters. Some of the accounts generated posts about social issues, such as civil and women's rights, that proved divisive."

While the lost ad revenues are merely a drop in the ocean for Facebook, the ability to advertise in the run-up to the holiday season is life and death for many small businesses:

"Advertising on Facebook is a lifeline for Epimonia, a Minneapolis-based company that makes and sells bracelets and other items made from the discarded life jackets worn by refugees fleeing on flimsy boats to Europe. The company spends several thousand dollars a year to advertise on Facebook, which targets users who have a favorable view of refugees based on the interests listed on their profiles. … 'Not being able to run ads before the holidays could put us out of business,' said [founder and CEO, Mohamed] Malim, who employs a handful of refugees to make bracelets, beanies and T-shirts."

The lasting impression is that this is a fascinating topic that is incredibly difficult to navigate – whether for CEOs trying to run a company or social media platforms trying to determine what content should be allowed on their platforms. This difficulty is magnified when the affected stakeholders really care about a particular issue and are willing to pushback if their concerns are not acknowledged or accommodated. But, I think these cases (where stakeholders care deeply) also fall into the 'exception' category I tried to demarcate in my post last week. The trouble is that everything cannot be an exception or else no work ever gets done. But, whenever a bright line is drawn, unintended consequences mean there are inevitably innocent victims caught up in the blunt solution that has been imposed on such a complicated issue. In short, the key questions are 'Where should we draw the line?' and 'Who gets to draw it?' So far, it is not at all clear that, when considering society as a whole, the best answer to either question is for-profit firms.

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 Did Facebook Mute Philanthropic Businesses?
By Miriam Jordan
November 18, 2020
The New York Times
Late Edition – Final
A14

Friday, November 20, 2020

Strategic CSR - Food stamps

The article in the url below details yet another example of how Amazon is able to adapt to and take advantage of our growing desire to shop online:

"Ian Babcock used to take the bus from his home in northern Michigan to get groceries, a trip that was inconvenient before the pandemic made it dangerous. For the last several months, he's been using his food-stamp benefits to get groceries delivered by Amazon."

Demonstrating great flexibility, it seems that the government agency in charge of administering food stamps in the U.S. (the Department of Agriculture) was responsible for allowing them to be used for online shopping, an option that is now available "for shoppers in 46 states and the District of Columbia." It has clearly been beneficial for many in navigating the pandemic and associated lockdowns this year:

"Babcock is among one million-plus U.S. households now using government benefits each month to buy groceries online. Their numbers spiked 50-fold this year after the spread of Covid-19 prompted the U.S. Department of Agriculture to make it easier for food-stamp recipients to shop on the web."

Perhaps predictably, the greatest beneficiaries of this move (beyond the customers themselves) is those companies large enough to deal with the bureaucracy of the U.S. government:

"While the USDA declined to provide an industry breakdown of such purchases, the main beneficiaries are Amazon.com Inc. and Walmart Inc. -- the only retailers in most states to take part in the agency's online shopping pilot."

And why would Amazon and Walmart bother with this? Of course because it increases their market share, but also because there is a lot of money to be made in serving the needs of those who have been hit the hardest by the pandemic and subsequent recession:

"For Seattle-based Amazon, the USDA program is an opportunity to get a chunk of the $55 billion that food-stamp recipients spent last year, purchasing that surged 20% in the first four months of 2020. It also lets the company court a cohort that has traditionally patronized Walmart or other discount grocers. Amazon is nearing saturation with higher-income U.S. households and has few other sources of new, potentially loyal customers in its most important market."

The spread of the U.S. government's Supplemental Nutrition Assistance Program (SNAP) program, and the obvious value it is creating for those in need, is apparent in the graph that accompanies the article:
 


As with Walmart, and any other large retailer that dominates its market, Amazon is succeeding because it is delivering what people want and, in cases such as this, cannot get elsewhere:

"When Michigan joined the program in May, Babcock, who suffers chronic health problems and has a suppressed immune system, started using his benefits to buy groceries on Amazon. The 55-year-old former financial planner, computer programmer and self-described veteran of Detroit's hardcore punk scene, also has a discounted Prime membership available to holders of Electronic Benefits Transfer (EBT) cards. Referring to Amazon Chief Executive Officer Jeff Bezos, he said 'the guy is making money hand over fist, but he's providing a service I can't get elsewhere.'"

What started out as a pilot program by the USDA looks set to become even more popular as the virus rages on. It is difficult to imagine people shedding the convenience once life returns to something resembling normal:

"Ruth Ilano, a comic artist in Massachusetts with multiple sclerosis, was making a quick trip to the store in May when she collapsed. She hasn't gone inside a supermarket since and is using SNAP benefits to help pay for groceries online. 'Online delivery was previously a nice touch,' she said. 'But now it's absolutely essential to my life.'"

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/


Amazon Lures Food-stamp Shoppers as Online Buying Surges 50-fold
By Matt Day
November 11, 2020
Bloomberg Businessweek