Strategic CSR - Unintended consequences

The article in the url below is interesting because it demonstrates what can happen when good intentions disrupt well-established market practices/solutions:

"When one of the best-known supermarket chains in the U.K. decided to remove plastic from its products, it hadn't anticipated a spike in shoplifting. Yet that is what happened when Iceland Foods Ltd. started selling steak in recyclable paper trays. Some customers bent the pliable containers in half and stuffed them down their trousers, executives said. Such theft wasn't as easy when the steaks came wrapped in more rigid plastic packaging."

Such unintended consequences have arisen at the supermarket (named Iceland), in part, because the company has pledged to remove single-use plastic (e.g., packaging) from "its hundreds of store-brand products" by the end of 2023. This tight, self-imposed deadline has resulted in the implementation of rushed solutions that haven't yet been tested properly:

"Disentangling plastic packaging from food can be exceptionally hard in the best of times. A surge in demand for plastic-wrapped food during the pandemic and recent supply-chain disruptions caused by the war in Ukraine are making this objective even harder. More-expensive paper packaging is proving to be a liability at a time of rampant inflation, particularly because Iceland typically caters to more price-sensitive consumers."

But, aside from cost-related issues, I find the unintended consequences to be far more interesting:

"When Iceland wrapped bananas in paper bands instead of plastic bags, the fruit rotted more quickly or snapped off. When it packed bread in opaque paper bags, sales fell as shoppers balked at buying something they couldn't see. When it punched holes in paper bags filled with potatoes to make the contents more visible, the bags ripped."

Plastic has become as widely-used as it is for a very good reason. Single-use plastic, in particular, is extremely important, especially in any scenario were hygiene (food) or cleanliness (healthcare) is a priority. If there were better options out there, you would think they would be used instead. So, now that we realize the damage plastic is doing, firms are being rushed into optimistic, perhaps reckless deadlines (something that could easily be a metaphor for the whole climate change conversation), without having ready solutions in place. So, the innovation timeline is being forced, with the resulting consequences we are witnessing:

"Plastics and food have a long and complex relationship. After World War II, plastics such as cellophane played a pivotal role in creating the modern grocery store, allowing retailers to bring precut, pre-wrapped meat, fish and produce under one roof and obviating the need for counter-staff at butchers, fishmongers and greengrocers. Concerns about a lack of recycling, litter and greenhouse gas emissions from plastics began swirling in the 1970s, accelerating toward the end of the following decade and picking up momentum again in recent years."

In spite of knowing these negative consequences since "the 1970s," countries like Britain are late to the game in trying to implement change, with all the trial and error consequences we would expect. The popularity of plastic today, merely increases the scale at which change must be introduced. The article, therefore, is not a critique of Iceland, which is actually being more creative than most in terms of trying to find a solution, quickly; more, it is reflective of the scale of the challenge and demonstrates how unprepared we are currently to meet it:

"Scrapping plastic is particularly tricky for a number of products Iceland offers. Bacon that isn't wrapped in plastic quickly discolors, salad leaves wilt and unwrapped cucumbers rot more quickly. When Iceland first replaced the roughly 10 million plastic bags it used for bunches of bananas with paper bands, the switch lasted just a couple of months. The bananas shrank 20%, snapped off and rotted more quickly. The grocer scrapped a separate trial selling loose bananas and other produce after customers found it inconvenient and sales dropped 30%. … The greasier the product, the more plastic it needs to stop the grease seeping out of the pack. A paper bag for frozen shrimp needs a thinner coating than one for chicken nuggets, for instance."

Take care

David

David Chandler

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

© Sage Publications, 2023

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

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

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

The Price of No Plastic? Stolen Steak

By Saabira Chaudhuri

June 18-19, 2022

The Wall Street Journal

Late Edition – Final

B6

https://www.wsj.com/articles/one-grocer-wanted-to-give-up-plastic-it-got-rotting-bananas-11655482334

 

Strategic CSR - Carbon offsets

I would categorize the article in the url below under the heading of 'least surprising stories of 2023':

"The forest carbon offsets approved by the world's leading provider and used by Disney, Shell, Gucci and other big corporations are largely worthless and could make global heating worse, according to a new investigation."

Specifically:

"The research into Verra, the world's leading carbon standard for the rapidly growing $2bn (£1.6bn) voluntary offsets market, has found that, based on analysis of a significant percentage of the projects, more than 90% of their rainforest offset credits – among the most commonly used by companies – are likely to be 'phantom credits' and do not represent genuine carbon reductions."

The graphic in the article presents the same information in more dramatic terms:

 

Perhaps the most surprising aspect of the story is that the lead word of the title is "Revealed," suggesting some counterintuitive investigative reporting that shakes the foundations of our existing belief system. While real reporting no doubt produced the data (and it is always good to have evidence to support an argument), the idea that this is a surprise will be news only to those who have not been paying attention:

"The analysis raises questions over the credits bought by a number of internationally renowned companies – some of them have labelled their products 'carbon neutral,' or have told their consumers they can fly, buy new clothes or eat certain foods without making the climate crisis worse. But doubts have been raised repeatedly over whether they are really effective."

Who knows, next they will be 'revealing' that we are going to miss the 1.5 degree Celsius Paris Accord target or that, even more shocking, all the 2050 carbon neutral commitments by companies and countries are going to be harder to achieve than our leaders have previously suggested. Stay tuned for more revealing stories about how we are in a much worse state than previously believed.

Take care

David

David Chandler

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

© Sage Publications, 2023

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

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

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

Revealed: more than 90% of rainforest carbon offsets by biggest provider are worthless, analysis shows

By Patrick Greenfield

January 18, 2023

The Guardian

https://www.theguardian.com/environment/2023/jan/18/revealed-forest-carbon-offsets-biggest-provider-worthless-verra-aoe

 

Strategic CSR - Population

I wanted to draw your attention to the article in the url below just because it seems like a pretty big deal:

"China has been the world's most populous country for hundreds of years. In 1750 it had an estimated 225m people, more than a quarter of the world's total. India, not then a politically unified country, had roughly 200m, which ranked it second. In 2023 it will seize the crown. The UN guesses that India's population will surpass that of China on April 14th. India's population on the following day is projected to be 1,425,775,850."

I had long ago heard that India's population would one day overtake China's, but I guess I did not expect it to happen right now. What is important about this point in time, though, is what the shift signals:

"The crown itself has little value, but it is a signal of things that matter. That India does not have a permanent seat on the UN Security Council while China does will come to seem more anomalous. Although China's economy is nearly six times larger, India's growing population will help it catch up. India is expected to provide more than a sixth of the increase of the world's population of working age (15-64) between now and 2050."

It is also interesting that China's population has been calculated to have peaked, while India's still has a way to go, as depicted in the charts accompanying the article:

 

Given that a country's population is generally negatively correlated with its level of economic development – higher wealth and participation of women in the workforce leads to declining birth rates (India's economy is still growing and projected to be the world's third largest "by 2029," but it's per capita GDP remains low), and given that India clearly still has room left to run, this will have all kinds of implications for resource utilization and, in particular, energy use (given that both countries still rely on fossil fuels, coal in particular, to produce their energy).

Take care

David

David Chandler

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

© Sage Publications, 2023

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

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

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

Fatter elephant, leaner dragon

By Brooke Unger

November 18, 2022

The Economist

Late Edition – Final

71-72

https://www.economist.com/the-world-ahead/2022/11/14/india-will-become-the-worlds-most-populous-country-in-2023

 

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.

Last Fall, the carbon offsets industry was subjected to the scrutiny of John Oliver: https://youtu.be/6p8zAbFKpW0

Needless to say, it did not come off looking very good. The segment was funny (in a demoralizing way), well researched, and accurate in exposing the hypocrisy that allows us all to pretend we are making progress in tackling climate change, when we are really just making the problem worse (see Strategic CSR – Climate inaction).

Hope you all have a good semester.

David

David Chandler

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

© Sage Publications, 2023

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

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

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