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

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

Thursday, September 28, 2023

Strategic CSR - Value

The article in the url below is a radio interview, held a decade after the 2008 Financial Crisis, with the author of a book that had just been released, The Value of Everything: Making and Taking in the Global Economy (2018). The author's goal in writing the book, and why I found it interesting, was to redefine (or perhaps 'recapture' is more accurate) what we understand to constitute value.

To summarize: In calling for a broader theory of value in a wide ranging discussion (in the interview), the author draws a distinction between value determining price (previously) and price determining value (today) – a change she argues has occurred over the last couple of hundred years. In other words, previously, the more we valued the way something was produced, the more we would be willing to pay for it (emphasizing trades people and artisanal skills). This compares to today, where the author argues we now have it backwards because we interpret the price itself as determining how much we should value the product or service – in other words, things that are expensive are, by definition, more valuable to us than things that are cheaper. This same logic can be extended to resources such as labor, which is today valued by wage levels (generally determined at the intersection of demand and supply), rather than necessarily the nature of the work that is performed. In other words, we reward rarity, simply for the sake of being rare, rather than rewarding the work that delivers the most happiness or social value, or some other metric, which we used to do and the author thinks is a more commonsensical understanding of what we should value.

Take care
David

David Chandler
© Sage Publications, 2023

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


A New Way to Calculate Economic Value
The Brian Lehrer Show
September 10, 2018
WYNC
 

Monday, September 25, 2023

Strategic CSR - Green-hushing

The article in the url below suggests that, in the face of growing polarization around ESG-related issues, companies are engaging in more "green-hushing":

"Executives at U.S.-listed companies mentioned 'environmental, social and governance,' 'ESG,' 'diversity, equity and inclusion,' 'DEI' or 'sustainability' on 575 earnings calls from April 1 to June 5, down 31% from the same period last year. … That is the largest such year-over-year decline and the fifth consecutive quarter of year-over-year drops, following a pickup in these discussions and corporate social efforts in the wake of the police killing of George Floyd in May 2020."

The chart in the article highlights the definite trend that emerged over the last couple of years:

 

Although executives are talking less often about the variety of issues that fall under the ESG umbrella, there does not seem to be any less action (which is encouraging):

"While such instances of 'green-hushing' may be part of a larger strategy for many companies to avoid weighing in on divisive issues, there is little sign that public companies are pulling back from the initiatives themselves, such as DEI employee training and emissions reductions. Companies still regularly voluntarily issue detailed sustainability reports, disclose greenhouse-gas emissions and tie a portion of their executive compensation to ESG metrics. Businesses are also busy preparing soon-to-be-unveiled new climate-disclosure requirements from the Securities and Exchange Commission by creating systems for collecting data and managing future compliance costs."

This reminds me of Walmart, which has long engaged in best-practice sustainability issues in its supply chain, but does not advertise their progress to their customers. Research suggests that customers who see a "green" product assume that it is priced as a premium product, even though it could easily be cheaper. But, Walmart is most concerned about its price sensitive customers and perceptions around value (rather than actual value), so better for the firm to engage in the practice, but not tell anyone about it.

This is opposite to a strategic CSR approach to business. Much better, in my opinion, to stand behind a clear set of values and run the business accordingly. In my mind, that generates greater loyalty to the firm among all stakeholders, which is essential in order to operate the business at its optimal potential.

Take care
David

David Chandler
© Sage Publications, 2023

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


Companies Seek to Avert Backlash, Avoid Talk of Social, Green Issues
By Mark Maurer
June 13, 2023
The Wall Street Journal
Late Edition – Final
A1-2
 

Friday, September 22, 2023

Strategic CSR - Oatly

I saw this ad in main section of The Sunday New York Times on May 7 (pp.18-19), earlier this year:


Several thoughts on this (and Oatly, which I featured favorably in a prior newsletter; see Strategic CSR – Oatly):

First, Tropicana was one of the earliest brands to calculate the carbon footprint of their orange juice, more than 10 years ago (see Strategic CSR – PepsiCo). What is interesting is that, at that time, I recall they did not advertise the number – the wanted the knowledge primarily to improve their operating/supply chain efficiency. But, if marketing is central to the effort, as it obviously is for Oatly, then there are two questions that are essential – how accurate is the number (are they counting everything that needs to be counted; there are real issues with scope 3 emissions, let along scope 4 – see Strategic CSR – Scope 4 emissions) and does anyone understand it? It will not cause any change in behavior unless customers understand what that number means and can compare it to competing products (the absence of consistent numbers across companies and industries is why all the ESG stuff has been essentially meaningless, so far; see Strategic CSR – ESG).

Second, Oatly is not as good a product as I originally thought. It tastes great, but the reason is that it is stuffed full of sugar. My doctor told me the golden rule is that the amount of protein needs to be greater than the amount of sugar, and I think in Oatly it is the same, 5g of both (if I am remembering the numbers correctly). Fairlife (a Coke product) is much better on this metric – lactose free and much more protein than sugar.

So, the danger with so many of these initiatives at present (because there is no standardization) is that Oatly draws consumers' attention to this work that they are doing (which is no doubt well-intentioned, but may or may not be meaningful – really hard to know without a lot of digging) as a way of concealing the fact that their product is not that much different than drinking a can of soda.

For more information on some of Oatly's progressive approach to this issue, see: https://www.oatly.com/en-us/stuff-we-sell/climate-footprint

Take care
David

David Chandler
© Sage Publications, 2023

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

Tuesday, September 19, 2023

Strategic CSR - Diamonds

The article in the url below suggests that artificial (man-made) diamonds are beginning to make serious inroads into the market for natural diamonds:

"More than a third of all engagement rings with center stones purchased last year were created in a lab, according to an online survey of nearly 12,000 U.S. couples. … That's double the number from 2020."

Since the survey data are self-reports, the results might be dismissed by some but, if there is a bias, I would expect it to be in favor of inflated numbers for real diamonds. More important, I think (and missing from the report), is whether it is price or values that is driving demand. A natural diamond takes millions of years to be created and then, of course, needs to be mined under conditions that are often far from ideal. Artificial diamonds, on the other hand, clearly do not take quite so long and are much more accessible (and ethical):

"Man-made diamonds are grown by placing a diamond seed in a sealed chamber with a carbon-containing gas such as methane. The carbon atoms bond like a lattice to the seed, building up a diamond crystal. It takes about 600 hours to grow one carat depending on the method. Their appeal, according to lab-diamond makers, is that they cause less environmental and human damage than mining diamonds from the earth as well as their cheaper price."

As a result, it is assumed, their popularity is spreading:

"It's not just engagement rings. Diamonds grown in a lab accounted for 13.6% of the $88.6 billion in diamond jewelry sold globally in 2022, up from less than 1% in 2015 where they had hovered since the early 2000s."

Specifically, the goal (for supporters) is to eradicate the possibility of an unethical supply chain:

"Proponents of man-made diamonds say growing diamonds in a lab helps stamp out conflict diamonds, or diamonds mined in war-torn regions and used to fund insurgencies. [In response] The mining industry says it traces the origins of diamonds to help stop the flow of conflict diamonds under what is called the Kimberley Process."

But, even if the primary motivating factor is morality (and the environmental angle is interesting), it is not clear there is an easy choice, as the main lobbing group for the diamond industry is getting better at arguing:

"'Consumers are being told that lab-grown diamonds are sustainable and that couldn't be further from the truth,' says David Kellie, CEO of the Natural Diamond Council, a diamond mining trade group. The group began airing videos on social media in April as part of what it calls a 'myth-busting' campaign. According to a new report by the group, more than 60% of lab-grown diamonds are made in China and India, where climate-polluting coal is the major power source. The report also touts efforts by the mining industry to cut carbon emissions and boost the economies of countries with major diamond mines such as Botswana and Namibia."

Take care
David

David Chandler
© Sage Publications, 2023

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


This Wedding Season, Diamonds Face a Challenge
By Suzanne Kapner
April 29-30, 2023
The Wall Street Journal
Late Edition – Final
B1, B6
 

Thursday, September 14, 2023

Strategic CSR - #boycott

The article in the url below raises a question that is central to the challenge of strategic CSR – how do firms know what their stakeholders truly care about? More specifically, it focuses on the intersection of strategic CSR and social media, and the extent to which firms should view online 'protests' as a valid indicator of stakeholder values:

"Amanda Booth first witnessed the phenomenon of labeling yourself progressive online while endorsing different values in real life when her white coworkers mentioned buying property in East Austin. The area is popularly known as a redlined neighborhood, primarily housing Austin's Black and brown community. Recently, the East Side has undergone major renovations with new modern houses, trendy bars, and local coffee shops, as gentrification pushes out the original inhabitants of the area. But when Booth, a 24-year old content designer in Austin, confronted her coworkers by explaining that Black and Hispanic people were being displaced from the area, her remarks were met with silence. 'Both of these guys proudly express themselves as being more on the progressive side of the Democratic party,' Booth said. 'Mind you, both of them have houses on the East Side now.' 'It's not enough to believe in racial justice and that Black people deserve things. White people need to begin giving up their privilege. The least they can do is try to plug into Austin's anti-displacement efforts. But I don't really see those people doing that,' Booth continued."

In prior newsletters, I have highlighted instances where companies acted in ways that led to consumer/public backlash (including negative headlines and #boycott protests online), but that did not affect future performance (e.g., Strategic CSR – Uber, Strategic CSR – United, and Strategic CSR – United Airlines). Clearly, all such examples are complicated and, to some extent, idiosyncratic. But, the fact that there are multiple examples suggests that, just because an online #boycott campaign erupts, that should not necessarily be taken as a sign by companies that their stakeholders actually mean what they say (or, at least that a meaningful proportion of them are serious in their online pledges to boycott).

So, what is the takeaway – that firms should not care what is written about them online? Probably not, but I do think that asking stakeholders what they care about is likely the least effective way of finding out. Much of what happens on social media is performative and, at best, captures the social temperature at a moment in time. Such momentary indicators should probably not drive firm strategy. Much better to ensure all action is consistent with the firm's professed values (which should be determined via discourse with stakeholders), and then ride out any criticism that follows. I am guessing if Budweiser had done that over the summer, for example, they may still be making the best selling beer in the U.S.

Take care
David

David Chandler
© Sage Publications, 2023

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


White clicktivism: Why are some Americans woke online but not in real life?
By Brianna Holt
December 9, 2020
The Guardian
 

Tuesday, September 12, 2023

Strategic CSR - Homelessness

I love buildings that have been designed intentionally to serve multiple purposes in the community. A good example is a "new family homeless shelter" in Washington D.C. that is described in the article in the url below and was named after "Aya" ("a benevolent soul in Turkish mythology"):

"The facility, … completed in 2021, aims to live up to its name. The Aya is part of a citywide effort spearheaded by DC Mayor Muriel Bowser in 2016 to create a series of neighborhood homeless shelters, one in each of the city's eight wards. Tasked with designing a 50-unit facility for Ward 6, [the architects] enlisted local residents for their input. The firm's design reflects their priorities …. Neighbors wanted a building that looked hopeful, not bleak."

Moreover, the local community asked that the building should not have a discernable front or a back:

"That means that on top of incorporating the special needs of a shelter for families experiencing homelessness, the designers made sure that the Aya has no face — or rather, four different faces. Each side of the building expresses a different function for the families staying at the shelter. … 'Each façade of the building is telling its own story.'"

There are a number of other features that reinforce the idea that this building is part of the solution for those who live in it, rather than exacerbating the problem, which is a big part of modern-day urban life in the U.S.:

"Families that stay at the shelter are quite young: The average age for children there is 3. So the city required it to offer safe spaces for play. [The architects] designed a series of outdoor-style indoor play rooms on the building's east side, rooms that climb in a stair-wise pattern up the building. Brick brise-soleil screens along these rooms offer a playful mirror of the architectural textures found in mid-century apartment buildings in the neighborhood."

One of the challenges of being a European living in the U.S. (after several years living in Japan) is coming to terms with the level of homelessness that is a very present part of the society in which I live. In short, homelessness is generally not a problem that you see in Europe, or other developed countries like Japan or South Korea. That means there are solutions that work in those countries that are not being applied here in the U.S., for whatever (likely ideological) reason. On that, the article in the second url below presents a fascinating re-framing of the problem, arguing that homelessness is purely a function of the amount of affordable housing in a society. The article also makes clear that homelessness is most definitely not caused by "drug abuse and mental illness," or even climate. Such ailments might be characteristics of homelessness, but not the main cause. This is clear when you realize that homelessness is not experienced equally across the country, but collects in very specific places where housing costs are high, which is most often in areas that are growing in popularity. So much so that, homelessness is really only a problem in those cities that everyone wants to move to:

"Why is this so? Because these 'superstar cities,' as economists call them, draw an abundance of knowledge workers. These highly paid workers require various services, which in turn create demand for an array of additional workers, including taxi drivers, lawyers and paralegals, doctors and nurses, and day-care staffers. These workers fuel an economic-growth machine—and they all need homes to live in. In a well-functioning market, rising demand for something just means that suppliers will make more of it. But housing markets have been broken by a policy agenda that seeks to reap the gains of a thriving regional economy while failing to build the infrastructure—housing—necessary to support the people who make that economy go. The results of these policies are rising housing prices and rents, and skyrocketing homelessness."

More specifically, because these supercities in the US are largely Democratic, the article argues it is the liberal policies advocated in these areas that are fueling the homeless crisis:

"Liberals have stated preferences that housing should be affordable, particularly for marginalized groups that have historically been shunted to the peripheries of the housing market. But local politicians seeking to protect the interests of incumbent homeowners spawned a web of regulations, laws, and norms that has made blocking the development of new housing pitifully simple. This contradiction drives the ever more visible crisis."

It naturally follows that the solution is to build more housing – more affordable housing in those cities to which people want to move means less homelessness:

"Houston's success in combatting homelessnessdown 62 percent since 2011—suggests that a focus on moving people into permanent supportive housing provides a road map to success. (Houston is less encumbered by the sorts of regulations that make building housing so difficult elsewhere)."

Although, initially, more housing will stem the price increases of those (loyal voters) who already own their own home; ultimately, it should make these cities even more livable (and desirable) because there should be less incidents of homelessness.

Take care
David

David Chandler
© Sage Publications, 2023

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


A DC Homeless Shelter with Many Faces
By Kriston Capps
December 10, 2022
Bloomberg

The Obvious Answer to Homelessness: And why everyone's ignoring it
By Jerusalem Demsas
December 12, 2022
The Atlantic
 

Thursday, September 7, 2023

Strategic CSR - Climate justice

The article in the url below suggests a meaningful step to making progress on climate change, and reinforces the sense that the vehicle to achieving this progress will increasingly be the courts (see Strategic CSR - Danone):

"A UN resolution was adopted [in March] that should make it easier to hold polluting countries legally accountable for failing to tackle the climate emergency, in a vote which was hailed as a historic victory for climate justice."

What makes this decision different, the article suggests, is that it helps define the responsibilities that state actors have to prevent climate change:

"The UN general assembly adopted by consensus the resolution spearheaded by Vanuatu, a tiny Pacific island nation vulnerable to extreme climate effects, and youth activists to secure a legal opinion from the international court of justice (ICJ) to clarify states' obligations to tackle the climate crisis – and specify any consequences countries should face for inaction."

As made clear in the reaction to the decision, it is those countries who had little to no role in producing the carbon that is now saturating our climate (and also did not see any of the economic benefits that it allowed) who will face some of the worst results of that pollution:

"'We are just ecstatic that the world has listened to the Pacific youth,' said Cynthia Houniuhi, president of Pacific Island students fighting climate change (PISFCC). 'Through no fault of our own, we are living with devastating tropical cyclones, flooding, biodiversity loss and sea level rise. We have contributed the least to the global emissions that are drowning our land.'"

The advantage of the resolution, from the perspective of its advocates, is that it helps lay out a legal process for determining culpability:

"The resolution, which was co-sponsored by more than 120 countries including the UK, but not the US, will help establish a legal litmus test of sorts for the global climate justice movement seeking to hold countries to account for climate failures in the courts. … In essence, the ICJ advisory will help establish whether there is legal obligation for countries to do what they have committed to in non-binding treaties such as the 2015 Paris climate accord, and whether failure to do so can be challenged through litigation."

But, as with most collective action taken in the name of combatting climate change, enforcement will be the defining factor as to whether this moves the needle, at all, and also the most challenging aspect of the decision to implement:

"While the opinion from the world's highest court will not be binding in domestic courts, establishing international legal rules can be influential on judges and governments. It also represents the first attempt to establish climate action obligations under international law, which advocates hope will strengthen climate-related litigation by helping vulnerable states and advocates hold countries accountable for their action and inaction."

As with any action that is perceived to be unfair, or even illegal, it is not the action itself that determines culpability, but the attempt to hold the actor to account by others that matters. In the U.S., for example, a law can be passed at a lower level, and implemented and enforced for years (even decades), but it is only when someone takes the time to sue that the law itself can be challenged and might be determined unconstitutional. It is always our willingness to hold others to account, in reality, that determines the behavior that is sanctioned or prohibited by society:

"The resolution emerged out of mounting frustration at the mismatch between the global community's rhetoric and action on climate change, amid escalating losses for countries such as Vanuatu, which face an existential threat due to sea-level rise. The frustration spurned a social movement led by Vanuatu law students turned youth activists, and work on the resolution was led by Indigenous lawyers in the Pacific."

Take care
David

David Chandler
© Sage Publications, 2023

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


United Nations adopts landmark resolution on climate justice
By Nina Lakhani
March 29, 2023
The Guardian
 

Monday, September 4, 2023

Strategic CSR - Sesame

File the article in the url below under the category of unintended consequences (see also Strategic CSR – Jevons Paradox; Strategic CSR – Dodd-Frank; and Strategic CSR – Unintended consequences). The issue is sesame allergies in children, and the responsibilities companies have to clearly label their food products with all ingredients and prepare them in a way that is consistent. On January 1, this year, the government introduced legislation in the U.S. that was designed to strengthen these responsibilities. In other words, if there was no sesame in the ingredients, companies were compelled to adequately clean their equipment to eradicate the possibility of contamination. Crucially, the new higher standards only applies to products that already have sesame as an ingredient. Straightforward, right?

"On Jan. 1, a law intended to safeguard the more than 1.5 million Americans with a sesame allergy … took effect. The law mandates, among other things, careful cleaning to prevent cross-contact between food products with and without sesame."

Apparently not. Because the companies felt a zero-tolerance approach to compliance was too difficult for them to guarantee, they instead started adding small amounts of sesame to products that normally did not have any as a way of skirting the law. This change has had predictable consequences for children who have sesame allergies:

"The result? Foods that sesame-allergic kids and adults have eaten safely for years are now potentially life-threatening."

What is interesting about this legislation, though, is that it is far from unique:

"The Food Allergy Safety, Treatment, Education and Research (Faster) Act mandates careful cleaning of manufacturing equipment to ensure foods are sesame-free or clear labeling of all foods with sesame — many foods previously were labeled only as containing tahini, which is made from ground sesame, for instance. Similar laws have protected millions of Americans allergic to peanuts, tree nuts, milk, eggs, wheat, soy, fish and shellfish for nearly two decades. Like those foods, sesame can provoke allergic reactions from mild to life-threatening."

Whatever the explanation, companies are being explicit about the response they made, seemingly with little concern for the implications for those who the legislation was intended to protect – allergic children:

"Some in the food industry say adding sesame flour is the safest path forward. They contend that they can't sufficiently clean their equipment to guarantee it is free of sesame, as the Faster Act requires. And, under federal labeling rules, they can't state that their products contain sesame unless the items actually contain it — so they're adding sesame and labeling it."

And, of course, they are not doing anything illegal. There is nothing to say that a product cannot contain sesame, as long as it is clearly labelled. The frustrating thing for parents of children with these allergies, however, is that they are now forced to re-check all the food products they had previously determined were safe for their kids. Needless to say, the companies do not advertise their change; they simply alter the ingredients listed on the label:

"Because companies are adding sesame in the form of flour, not seeds, the added allergen is invisible to the eye, making it more dangerous — especially when food is served in group settings, like schools and summer camps, where labels aren't nearby, advocates say."

The fact that legislation like this is far from unique makes the corporate response more frustrating is it appears to be the first time it is happening (whereas, previously, they complied). It could be that the legislation is more onerous in this case, but that is not suggested in the article. More likely, it seems the companies just could not be bothered to comply and that adding a little bit more of another ingredient to the product (even though there is no beneficial impact in terms of that product) was the easiest response:

"'There was no hint that this would happen, because companies had not done this with the other eight allergens [specified in federal law], and this isn't happening in other countries that label for sesame,' said Sen. Chris Murphy (D-Conn.), one of the bill's co-sponsors."

As a result, the only reason that sesame flour is now an ingredient in many products (there are lots of examples in the article) is because it helps companies avoid complying with a law that would increase their costs. The companies themselves, of course, are presenting their response to the legislation as an attempt to increase customer safety:

"The American Bakers Association did not respond to questions about adding sesame flour. Instead, it provided a statement from Lee Sanders, its senior vice president of government relations and public affairs: 'The wholesale baking sector prioritizes consumer safety. Baking companies are working with their customers, including restaurants, to transparently disclose any allergen labeling changes to help ensure consumer safety.'"

The response of parents with allergic children who are now threatened, is slightly different:

"Manufacturers 'could have done the right thing, and they didn't,' said Brubaker-Flood, the mom from Michigan. 'They had ample time to come up with new procedures to prevent cross-contamination, and instead they took the crazy route and deliberately added an allergen instead.'"

For more on this issue, see the article in the second url below.

Take care
David

David Chandler
© Sage Publications, 2023

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


To comply with a new sesame allergy law, some businesses add – sesame
By Karen Weese
April 11, 2023
The Washington Post

Sesame Labels Backfire for Allergic
June 15, 2023
The Wall Street Journal
Late Edition – Final
A6