Strategic CSR - Economics

The article in the url below is a review of a book titled, Cents and Sensibility: What Economics Can Learn from the Humanities. As the subtitle suggests, the goal of the book is to point out that economics (the study of human exchange) loses much of its predictive value without an understanding of the humans it is trying to study:

 

"Covering such topics as university admissions, child-rearing, organ harvesting and economic development, the chapters each analyze public questions first through economics, and then through literature. The conclusion is that economics—a hugely influential approach to studying human societies—isn't worth all that much without first understanding what it means to be human."

 

This duality is demonstrated excellently by Adam Smith's massive contribution to the field of economics:

 

"They exhort students of economics to grasp that the author of The Wealth of Nations also wrote The Theory of Moral Sentiments. The real Smith observes that human beings summon qualities of sympathy balanced with their self-interest. People are not merely economic maximizers: They are ethical creatures from the get-go."

 

An excellent example illustrates the intuitive nature of the book's argument:

 

"You can't measure gross domestic product or unemployment without first saying what they are, qualitatively, as categories of interest to humans. If we were to decide that a society were best judged using the number of houses of worship erected—or, for that matter, the number of M&M candies consumed—such a measure, not dollar-value output, is what we would study. There is no God-term telling us from the outside what categories humans care about. Economics, physics, biology, history—all need the first, humanistic, categorizing step."

 

The book's authors build on this fundamental point to critique the current focus of education in many Western societies. Concerned about the West's declining prowess in math and science subjects, reformists are calling for the pendulum to swing too far in the opposite direction:

 

"… most of what actually goes on in STEM's 'M' and 'S'—and even a good deal of the 'E'—is, like the humanities, an inquiry into the artistic or intellectual products of humans."

 

The message here is great, I think. The Financial Crisis of 2008 shows us many things, not least of which is that an over-reliance on economic models that incorporate unrealistic assumptions about human behavior are destined to lead to poor public policy decisions. While this is very true, however, the opposite is also true—there is much that the humanities and social sciences can learn from economics. Models of corporate social responsibility that make unrealistic assumptions about human behavior have little of value to offer contemporary debates about economic and social life. As this book reveals, it is essential to incorporate ideas from across the intellectual spectrum in order to have a mature discussion of where we are and how we got here and, of course, set a reasonable path to changing the situation (if that is what we decide to do).

 

Take care

David

 

David Chandler

Strategic Corporate Social Responsibility: Sustainable Value Creation (4e)

© Sage Publications, 2017

 

Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler4e

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

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

 

 

A Human Face For Economics

By Deirdre N. McCloskey

September 14, 2017

The Wall Street Journal

Late Edition – Final

A15

https://www.wsj.com/articles/economics-with-a-human-face-1505343242

 

Strategic CSR - Pensions

The article in the url below discusses one of the consequences in the U.S. of failing to provide citizens with access to universal healthcare (and preventative medicine, nutrition advice, healthy food, etc., etc.):

 

"Steady improvements in American life expectancy have stalled, and more Americans are dying at younger ages. But for companies straining under the burden of their pension obligations, the distressing trend could have a grim upside: If people don't end up living as long as they were projected to just a few years ago, their employers ultimately won't have to pay them as much in pension and other lifelong retirement benefits."

 

If this trend continues, corporations will be saved from the inept decision-making of executives over decades regarding company pension plans. Rather than having to correct those mistakes that have led to woefully under-funded plans with insufficient resources to pay commitments made, perhaps the amount of money they need to set aside will fall to match the lower life expectancies of plan participants:

 

"In 2015, the American death rate—the age-adjusted share of Americans dying—rose slightly for the first time since 1999. And over the last two years, at least 12 large companies, from Verizon to General Motors, have said recent slips in mortality improvement have led them to reduce their estimates for how much they could owe retirees by upward of a combined $9.7 billion, according to a Bloomberg analysis of company filings. 'Revised assumptions indicating a shortened longevity,' for instance, led Lockheed Martin to adjust its estimated retirement obligations downward by a total of about $1.6 billion for 2015 and 2016, it said in its most recent  annual report."

 

Note the reference to "shortened longevity," which is the polite way of saying our employees are dying earlier. I wonder if that has anything to do with the way they were treated during their working lives?

 

Take care

David

 

David Chandler

Strategic Corporate Social Responsibility: Sustainable Value Creation (4e)

© Sage Publications, 2017

 

Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler4e

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

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

 

 

Americans Are Dying Younger, Saving Corporations Billions

By John Tozzi

August 8, 2017

Bloomberg Businessweek

https://www.bloomberg.com/news/articles/2017-08-08/americans-are-dying-younger-saving-corporations-billions

 

Strategic CSR - Coca-Cola (II)

Following on from Monday's Newsletter, the article in the url below quantifies one of the many social consequences for our obsession with soft-drinks (and plastic):

 

"Earlier this year Greenpeace revealed Coca-Cola is responsible for selling more than 100bn single-use plastic bottles across the globe every year – that's more than 3,000 every second."

 

The author (who is the executive director of Greenpeace UK) uses this statistic to criticize Coca-Cola's recent announcement (only in the UK) that it will increase the recycled content of its plastic bottles to 50%:

 

"[This] … shows a startling lack of ambition from the soft-drinks giant to tackle one of the greatest environmental challenges facing us: the plastic pollution choking our oceans. … This new plan is no game changer. Limited to operations in the UK, Coca-Cola's plans amount to increasing its existing target for recycled content by a mere 10%, launching yet another public awareness campaign to keep the focus on litterers, and trialing what appears will be little more than a promotional scheme for buying more Coca-Cola bottles."

 

Beyond criticizing this specific announcement, however, the author asks why the company is not being more ambitious in its targets:

 

"… is reaching 50% recycled content in three years' time significant? The truth is that 100% recycled bottles are feasible and have been rolled out for a number of soft drinks products over the past decade. In 2007, for example, Suntory's Ribena became the first major UK soft drink brand to use 100% recycled plastic. Coca-Cola, the world's biggest soft drinks company, is lagging far behind."

 

His skepticism seems warranted, based on prior performance targets that are announced with much fanfare, only to recede into the distance and get lost among the noise of day-to-day business:

 

"The company's plans, which it says it will reveal later this year, may feature a money-off voucher scheme to reward customers returning small Coca-Cola bottles to shops. … If the vouchers can be redeemed on yet more plastic Coca-Cola bottles, this will only boost the already staggering global plastic bottle sales of a million a minute. It's also worth pointing out that Coca-Cola's mildly higher goal to source 50% recycled content should be taken with a pinch of salt given the company's history of failing to keep its promises. Coca-Cola got less than half way to meeting its global 2015 target to source 25% of its plastic bottles from recycled or 'renewable' material, for example plant-based plastics. Globally the company reached a pitiful 7% recycled material."

 

The management of key resources (i.e., water and plastic) has to be a priority for Coca-Cola. The firm's social license is already threatened with the health consequences of the consumption of its products. It should be doing more to get out ahead of yet another threat to its business.

 

Happy Thanksgiving to those of you here in the U.S.

David

 

David Chandler

Strategic Corporate Social Responsibility: Sustainable Value Creation (4e)

© Sage Publications, 2017

 

Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler4e

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

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

 

 

If you care so much, Coke, why aren't your bottles 100% recycled?

By John Sauven

July 13, 2017

The Guardian

https://www.theguardian.com/sustainable-business/2017/jul/13/coca-cola-plastics-pollution-oceans-bottles-packaging-recycling-pr-fizz-greenpeace-john-sauven

 

Strategic CSR - Coca-Cola (I)

This week's Newsletters will focus on the operations of one of the most valuable brands in the world – Coca-Cola. The article in the url below gives some idea of the scale of operations of this global company. It also demonstrates the resource utilization such operations require:

 

"Coca-Cola increased its production of throwaway plastic bottles last year by well over a billion, according to analysis by Greenpeace."

 

Please note that this is an increase of 1 billion, not 1 billion total! Beyond the raw number, what is important about this is that each bottle is a single-use product/packaging. Although it can be recycled, there is variation on the extent to which these bottles actually are recycled. Either way, we are talking about a lot of plastic, every year, that goes toward a product that, shall we say, has debatable value for society:

 

"The increase puts Coke's production at more than 110bn bottles each year, according to Greenpeace."

 

Now, Greenpeace is not necessarily the most objective organization when it comes to the environment. But, even allowing for a billion here or there, that is a massive scale of production (and consumption). The volume of bottles produced amounts to "an astounding 3,400 a second." What's more is that Coca-Cola uses many more resources in its packaging than just plastic:

 

"Coca-Cola has confirmed that single-use plastic bottles made up 59% of its global packaging in 2016 compared to 58% in the 12 months before."

 

And, of course, Coca-Cola is not the only drinks company out there:

 

"The scale of production contributes to a plastic mountain which is growing vastly year on year. Figures obtained by the Guardian reveal that by 2021 the number of plastic drinks bottles produced globally will reach more than half a trillion."

 

In terms of recycle rates:

 

"Fewer than half of the bottles bought in 2016 were collected for recycling and just 7% of those collected were turned into new bottles. Instead, most plastic bottles produced end up in landfill or in the ocean."

 

And much of the rest doesn't even make it to landfills:

 

"Between 5m and 13m tonnes of plastic leaks into the world's oceans each year to be ingested by sea birds, fish and other organisms, and by 2050 the ocean will contain more plastic by weight than fish, according to research by the Ellen MacArthur Foundation."

 

Take care

David

 

David Chandler

Strategic Corporate Social Responsibility: Sustainable Value Creation (4e)

© Sage Publications, 2017

 

Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler4e

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

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

 

 

Coca-Cola increased its production of plastic bottles by a billion last year, says Greenpeace

By Sandra Laville

October 2, 2017

The Guardian

https://www.theguardian.com/environment/2017/oct/02/coca-cola-increased-its-production-of-plastic-bottles-by-a-billion-last-year-say-greenpeace

 

Strategic CSR - Self-interest

The article in the first url below is an excellent analysis by David Brooks of the current administration's view of America's place in the world – in particular in relation to its decision over the summer to withdraw from the Paris Accord. On that particular decision, there is not much I can say that won't get me into trouble, but I think the article in the second url below by Bill McKibben, the founder of 350.org, is particularly eloquent.

 

The purpose of this Newsletter, however, is to comment on Brooks' column. While I agree with almost all of what Brooks writes, I disagree with his equating "self-interest" with "selfishness." I have thought a lot about self-interest and its role in motivating human behavior and, in particular, in generating optimal outcomes. I have two responses that, in my thinking, allow the pursuit of self-interest to lead to optimal outcomes for society, but in a way that also incorporates all of the good points that Brooks raises.

 

First, "self-interest" does not equal "selfishness." My self-interest can be served by making the community around me stronger – by contributing, rather than taking away. I can easily justify paying higher taxes as in my self-interest, for example, if I know the extra funds will be reinvested in education or healthcare or providing a safety net for those most in need (and as long as I value those things, which I do). Conversely, I can see the harm done to me individually if I refuse to contribute to the common good simply because I want to increase my personal income in the short term. It is against my self-interest, for example, to refuse to contribute to funding the police if, as a result, crime increases and my personal property (or safety) is jeopardized as a result.

 

Second, the idea or "rational self-interest" is a misnomer, a core feature of classical economics that has produced highly constrained theoretical models founded on warped assumptions that lead to misinformed public policies. Humans pursue their perceived self-interest, not their actual self-interest. That does not mean these two things cannot be the same thing, on occasions. In my experience, however, more often than not, they are different (even assuming someone's 'actual' self-interest can be identified). The difference between the two is accounted for by the emotions, biases, morals, and values that make us human (and flawed, on many levels).

 

It is the combination of these two points at the intersection of economic theory and human psychology that, in essence, differentiates strategic CSR (or sustainable value creation) from mainstream discussions of CSR and sustainability. Understanding how humans actually make decisions, rather than how we wish they made decisions (what they are, rather than what we wish they were), is essential to understanding how our economic and social systems work. Once we agree on that, we can begin to discuss how to build a more sustainable economic system, but that discussion is pointless if it is based on false or unrealistic assumptions.

 

Take care

David

 

David Chandler

Strategic Corporate Social Responsibility: Sustainable Value Creation (4e)

© Sage Publications, 2017

 

Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler4e

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

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

 

 

The Axis of Selfishness

By David Brooks

June 2, 2017

The New York Times

Late Edition – Final

A25

https://www.nytimes.com/2017/06/02/opinion/donald-trump-poisons-the-world.html

 

Trump's Reckless Climate Decision

By Bill McKibben

June 2, 2017

The New York Times

Late Edition – Final

A25

https://www.nytimes.com/2017/06/01/opinion/trump-paris-climate-accord.html

 

Strategic CSR - Robots

The article in the url below offers a calming perspective on the current hyperventilation about the threat to employment of artificial intelligence. In doing so, it presents two points that help me better process the flood of opinion about this topic from all sides of the debate. First, is the need to place AI in some context. For example, it is a fact that "the field of artificial intelligence is now more than a half-century old," but we have managed to survive (if not exactly thrive) so far. As a result of this long history, automation has been a constant in the evolving nature of 'work' to an extent that we often forget (emphasis added):

 

"… despite centuries of progress in automation and recurrent warnings of a jobless future, total employment has continued to increase relentlessly, even with bumps along the way. More remarkable is the fact that today's most dire projections of jobs lost to automation fall short of historical norms. A recent analysis … quantified the rate of job destruction (and creation) in each decade since 1850, based on census data. They found that an incredible 57% of the jobs that workers did in 1960 no longer exist today."

 

Beyond this fundamental context, a more subtle distinction is between the potential for robots to replace jobs verses the potential to replace specific tasks. In other words, rather than replace workers, they enable existing workers to do their jobs more effectively. Recent studies in this vein suggest that:

 

"… by 2055, more than 50% of all work-related tasks will be subject to automation. Such studies naturally raise concerns that we may be on the brink of an unprecedented employment crisis. But robots aren't mechanical people. They are a new wave of automation, and like previous waves, they reduce the need for human labor. In doing so, they make the remaining workers more productive and their companies more profitable. These profits then find their way into the pockets of employees, stockholders and consumers (through lower prices). This newfound wealth, in turn, increases demand for products and services, compensating for lost jobs by employing even more people."

 

Ultimately, there is a pattern to the encroaching use of AI in work – one that should help society, rather than necessarily threaten it:

 

"As the logic goes, if artificial intelligence is getting so smart that it can recognize cats, drive cars, beat world-champion Go players, identify cancerous lesions and translate from one language to another, won't it soon be capable of doing just about anything a person can? Not by a long shot. What all of these tasks have in common is that they involve finding subtle patterns in very large collections of data, a process that goes by the name of machine learning. The kinds of data vary, of course. It might be pixels in cat photos, bytes streaming from a dashboard camera, millions of computer-generated games of Go, digital X-rays or volumes of human-translated documents. But it is misleading to characterize all of this as some extraordinary leap toward duplicating human intelligence. The selfie app in your phone that places bunny ears on your head doesn't 'know' anything about you. For its purposes, your meticulously posed image is just a bundle of bits to be strained through an algorithm that determines where to place Snapchat face filters. These programs present no more of a threat to human primacy than did automatic looms, phonographs and calculators, all of which were greeted with astonishment and trepidation by the workers they replaced when first introduced."

 

Robots, AI, machine-learning, etc., will increase productivity, which will result in greater wealth, which will then be spent:

 

"Luxury hotels are not prized because they are more efficient but because their staff is more attentive. People pay more to watch a barista brew their latte than for a comparable product from a vending machine, and I somehow doubt that our grandchildren will want to tell their troubles to a robotic bartender or prefer to stick their hands in a manicure machine. In the future, the masses may make do with simple-minded domestic robots while the upper crust hires ever more butlers and maids. The Jetsons, after all, were a middle-class family."

 

The key, of course, is to make sure the wealth is more evenly distributed, rather than narrowly distributed. This, of course, is the essence of the current debate that is causing so much political upheaval. But, that is a different issue as to whether AI is to be welcomed and encouraged, rather than feared. We know that humans do not handle change very well. We are currently undergoing a period of concentrated change, the turmoil from which is beginning to show up in political elections/structures. The article reinforces my sense that, while progress always represents a dislocation that will effect some sections of society more negatively than others; in general, the majority will benefit. For example, I do not see many people suggesting we should return to an agrarian economy, even though the shift to an industrialized society caused massive upheaval for the 40% of society that used to work on farms.

 

Take care

David

 

David Chandler

Strategic Corporate Social Responsibility: Sustainable Value Creation (4e)

© Sage Publications, 2017

 

Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler4e

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

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


Don't Fear the Robots

By Jerry Kaplan

July 22-23, 2017

The Wall Street Journal

Late Edition – Final

C3

https://www.wsj.com/articles/dont-fear-the-robots-1500646623

 

Strategic CSR - Oceans

The article in the url below (a lead editorial in The Economist) contains some mind-boggling statistics about the world's oceans:

 

"EARTH is poorly named. The ocean covers almost three-quarters of the planet. It is divided into five basins: the Pacific, the Atlantic, the Indian, the Arctic and the Southern oceans. Were all the planet's water placed over the United States, it would form a column of liquid 132km tall. The ocean provides 3bn people with almost a fifth of their protein (making fish a bigger source of the stuff than beef). Fishing and aquaculture assure the livelihoods of one in ten of the world's people. Climate and weather systems depend on the temperature patterns of the ocean and its interactions with the atmosphere. If anything ought to be too big to fail, it is the ocean."

 

"Humans have long assumed that the ocean's size allowed them to put anything they wanted into it and to take anything they wanted out. Changing temperatures and chemistry, overfishing and pollution have stressed its ecosystems for decades. The ocean stores more than nine-tenths of the heat trapped on Earth by greenhouse-gas emissions. Coral reefs are suffering as a result; scientists expect almost all corals to be gone by 2050."

 

"By the middle of the century the ocean could contain more plastic than fish by weight. Ground down into tiny pieces, it is eaten by fish and then by people, with uncertain effects on human health. Appetite for fish grows nevertheless: almost 90% of stocks are fished either at or beyond their sustainable limits. The ocean nurtures humanity. Humanity treats it with contempt."

 

After framing a particularly dire problem, the editorial details several steps we can take to improve the situation. They deserve the attention of us all; whether they will receive it, however, is another matter altogether.

 

Have a good weekend.

David

 

David Chandler

Strategic Corporate Social Responsibility: Sustainable Value Creation (4e)

© Sage Publications, 2017

 

Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler4e

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

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

 

 

Deep trouble

Editorial

May 27, 2017

The Economist

18

http://www.economist.com/news/leaders/21722647-ocean-sustains-humanity-humanity-treats-it-contempt-how-improve-health

 

Strategic CSR - Employees

The article in the url below sheds an interesting light on the issue of employee background checks. What is interesting is that, although most firms conduct background checks prior to employment, they do not conduct any checks subsequently:

 

"While 98% of the 278 executives surveyed by insider threat-monitoring firm Endera said their organization checks people before offering them a job, fewer than 25% said they make such checks after someone joins the group."

This lack of attention, post-hiring, is even more surprising when it turns out there are good reasons to conduct these checks:

"The lack of post-employment monitoring remains prevalent despite the fact one in every 1,000 employees is arrested every month—and despite the fact 79% of security executives and 81% of operations executives who were asked in the survey said they would screen or consider screening their entire workforce every day if they could. While companies manage cybersecurity risks, they focus on insider threats such as data and device behavior, preventing data loss and managing access—and this leaves unknown all the things an employee does when not working, said Endera Chief Executive Raj Ananthanpillai."

While there is a balance that needs to be struck between employee trust and workplace security, it seems that the disproportionate focus on pre-hiring checks is misplaced. This issue is even more important, given the way that trends towards greater contracting are shaping the relationships individuals have with the firms that hire them:

 

"The challenge is even more acute for companies that contract employees, as they often may not conduct any checks themselves and sometimes don't know if the staffing agency they used to get the workers did background checks, the survey found. This comes despite the fact contract employees generated twice as many criminal alerts versus workers at Fortune 500 firms—11.1 criminal alerts per 1,000 contractors versus 6.3 for employees, said Endera."

 

Take care

David

 

David Chandler

Strategic Corporate Social Responsibility: Sustainable Value Creation (4e)

© Sage Publications, 2017

 

Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler4e

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

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

 

 

Lack of Post-employment Checks Expose Companies

By Ben DiPietro

April 27, 2017

The Wall Street Journal

https://blogs.wsj.com/riskandcompliance/2017/04/27/the-morning-risk-report-lack-of-post-employment-checks-expose-companies/

 

Strategic CSR - Impact investing

The article in the url below presents a multiple-choice quiz on the socially-responsible (or impact)-investing industry. The article includes 10 questions. Here are a selection, with the answers underlined:

 

3. Last year, investors put how much money into ESG funds in the U.S.?

A. $20 million

B. $100 million

C. $1 billion

D. $3 billion

 

4. At the start of 2016, the sustainable, responsible and impact investing category represented what percentage of all investment under professional management in the U.S.?

A. 22%

B. 10%

C. 5%

D. 0.1%

 

5. From 2014 to 2016, sustainable investing grew by what percentage in the U.S.?

A. 12%

B. 20%

C. 33%

D. 55%

 

6. On a global level, what is the dollar amount of assets professionally managed under ESG strategies?

A. $15.56 trillion

B. $22.89 trillion

C. $34.45 trillion

D. $45.67 trillion

 

7. True or false: There is no official governing body that regulates environmental, social and governance criteria.

 

Explanations for the answers, along with additional information and the other questions, is provided in the article.

 

Take care

David

 

David Chandler

Strategic Corporate Social Responsibility: Sustainable Value Creation (4e)

© Sage Publications, 2017

 

Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler4e

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

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

 

 

Test Your Smarts on … Ethical Investing

By Matthew Kassel

July 10, 2017

The Wall Street Journal

Late Edition – Final

R8

https://www.wsj.com/articles/how-much-do-you-know-about-ethical-investing-1499349815

 

Strategic CSR - Electric cars (II)

In contrast to the Newsletter sent earlier this week, today's Newsletter presents some good news about electric cars. The article in the first url below, for example, reports that, in Denmark:

 

"Electric car owners are earning as much as $1,530 a year just by parking their vehicle and feeding excess power back into the grid."

 

In other words, the excess energy created while the car is running is stored in the battery and fed back into the grid when the car is parked. While the article highlights the challenges for utilities in integrating energy from renewable sources into a country's energy network, it also reveals the creativity that can result from new challenges. This is especially important as electric car sales are predicted to overtake combustion engine sales by 2038:

 

"While the Tokyo-based automaker has trials with more than 100 cars across Europe, only those in Denmark are able to earn money by feeding power back into the grid. There, fleet operators collected about 1,300 euros ($1,530) a year using the two-way charge points."

 

The article in the second url below from The Economist expands on these benefits, running a special report on the death of the internal combustion engine and the rise of electric battery cars, which are rapidly becoming more efficient:

 

"The Chevy Bolt has a range of 383km; Tesla fans recently drove a Model S more than 1,000km on a single charge. UBS, a bank, reckons the 'total cost of ownership' of an electric car will reach parity with a petrol one next year. … It optimistically predicts electric vehicles will make up 14% of global car sales by 2025, up from 1% today. Others have more modest forecasts, but are hurriedly revising them upwards as batteries get cheaper and better – the cost per kilowatt hour has fallen from $1,000 in 2010 to $130-200 today. Regulations are tightening, too. Last month Britain joined a lengthening list of electric-only countries, saying that all new cars must be zero-emission by 2050."

 

While there are concerns about the jobs that will be displaced as a result of the shift to electric cars (which are easier to build and maintain), the article argues that the benefits to society as a whole far outweigh any costs:

 

"Lots of shared, self-driving electric cars would let cities replace car parks (up to 24% of the area in some places) with new housing, and let people commute from far away as they sleep. … [The shift] will offer enormous environmental and health benefits. Charging car batteries from central power stations is more efficient than burning fuel in separate engines. Existing electric cars reduce carbon emissions by 54% compared with petrol-powered ones. … The World Health Organization says that [air pollution] is the single largest environmental health risk, with outdoor air pollution contribution to 3.7m deaths a year. One study found that car emissions kill 53,000 Americans each year, against 34,000 who die in traffic accidents."

 

In short, the future is electric … . Or not, depending on which source you read, how you weight the relative pros and cons (of electric and other options), and what assumptions you make about future prices/growth/innovation. Other than that, it is easy … ! Like many innovations, progress is bumpy and some sort of middling-course is probably more likely than the most optimistic or most pessimistic forecasts.

 

Take care

David

 

David Chandler

Strategic Corporate Social Responsibility: Sustainable Value Creation (4e)

© Sage Publications, 2017

 

Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler4e

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

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

 

 

Parked Electric Cars Earn $1,530 From Europe's Power Grids

By Jess Shankleman

August 10, 2017

Bloomberg Businessweek

https://www.bloomberg.com/news/articles/2017-08-11/parked-electric-cars-earn-1-530-feeding-power-grids-in-europe

 

Roadkill

Editorial

August 12, 2017

The Economist

7

https://www.economist.com/news/leaders/21726071-it-had-good-run-end-sight-machine-changed-world-death