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.

Showing posts with label Dow Chemicals. Show all posts
Showing posts with label Dow Chemicals. Show all posts

Monday, April 15, 2019

Strategic CSR - Napalm

The article in the url below comments on the recent uprisings among the employees of tech companies who are objecting to their employer's involvement with U.S. military agencies (see also Strategic CSR – Google):
 
"Over the past few months, a fierce debate has erupted in Silicon Valley over whether large technology companies like Amazon, Google and Microsoft should join forces with the United States military, along with agencies like Immigration and Customs Enforcement."
 
As the author notes, so far the "debate has been conducted along ethical lines." He cites a recent example at Microsoft, whose employees drafted an open-letter to management expressing their concerns about the company's adaptation of its virtual reality hardware for application on the battlefield:
 
"'We did not sign up to develop weapons, and we demand a say in how our work is used,' the Microsoft employees wrote."
 
In contrast, the author wants to take the conversation in what he sees as a different direction:
 
"This is a debate worth having. But there is a more pragmatic question swirling around it, one surprisingly few people are asking. Namely: Could Big Tech's decision to pursue controversial defense and law enforcement contracts be a financial mistake?"
 
He then cites the value of some of these contracts, noting that, on the face of it, they make sense. The costs come in the shape of potential reputation damage – among customers, to be sure, but also among potential employees who may think twice before working for such companies. The dramatic comparison used, to maximum journalistic effect, is with Dow Chemical's decision to supply the U.S. military with napalm during the Vietnam War:
 
"Dow Chemical stopped making napalm for the military in 1969, just four years after it had begun. But the reputational damage haunted the company for decades. … All told, the $5 million napalm contract most likely cost Dow Chemical billions of dollars. And it was the kind of unforced error that could have been avoided if company executives had listened to early signs of opposition, done some risk analysis and changed course."
 
The author's point is that, once a technology is developed for the military, the companies lose control over how it is used, forever. And, given that we are unable to predict how society's definitions of acceptable behavior will evolve into the future, even if we suppose that there is general support for these firms to work with the government today, that does not mean that support will always be there. And, as with Dow, if things go badly, they can go very badly for everyone:
 
"Already, there are signs of trouble on the horizon. At Stanford, fliers recently appeared on campus walls urging students not to work for Amazon, Microsoft, Palantir and other companies with reported contracts with ICE and law enforcement agencies. And artificial intelligence experts caution that the stigma of being seen as a war profiteer could repel idealistic recruits for years to come. … In fact, in today's corporate operating environment, turning down controversial military and government contracts could be a selling point."
 
All of this is fine. My point is to push back on the idea that this "financial perspective" is a different question to the "ethical" one the author begins with. I would say, instead, that it is the same question reframed using a financial lens. This is a lot of what Strategic CSR seeks to do. The basic argument is that, since most (if not all) company transactions can be monetized at some level (i.e., all stakeholder interactions have the potential to affect profit, either positively or negatively), then focusing on the finances is a more revealing analysis. But, it is not a different question and to focus on the finances does not remove the ethics from the decision. All decisions that we make, as humans, are based on our values/ethics/morals, the precise mix of which are unique to each of us. I have a different set of values than you do. We probably agree on many of them, but also probably, not 100% of them. As such, at the margins, I make slightly different decisions to you. But, where we are talking about our interactions with companies as stakeholders, the effect of our decisions (our values/ethics/morals in action) increase the firm's profit (when we engage) and decrease its profit (when we boycott). Like many in the mainstream CSR community, this author is drawing a clear distinction between the two (ethics and finances) while, from a Strategic CSR perspective, they are essentially indistinguishable.
 
Take care
David
 
 
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/
 
 
Why Napalm is a Cautionary Tale for Tech Giants
By Kevin Roose
March 6, 2019
The New York Times
Late Edition – Final
B1
 

Monday, September 18, 2017

Strategic CSR - Charity

In the aftermath of the devastation caused by Hurricane Harvey in Texas, local companies have been pledging donations to help with the rebuilding effort:
 
"Chevron, an energy giant with several offices in the Houston area, pledged $1 million to post-Harvey disaster relief efforts. So did Exxon Mobil and Dow Chemical, two companies with facilities hit by the storm. Companies in less regional industries also donated: Amazon offered to match $1 million in donations to the American Red Cross, while Verizon promised $10 million. Walmart, which took a front-line role in the clean-up after Hurricane Katrina, sent truckloads of emergency supplies to the affected area. In all, corporations have pledged more than $65 million to help clean up the wreckage from Harvey, according to a Wednesday morning estimate by the U.S. Chamber of Commerce."
 
This is necessary because early estimates suggest that the cleanup bill will be substantial:
 
"Hurricane Harvey may be one of the costliest natural disasters in American history, according to initial forecasts. Moody's Analytics has estimated that the storm's damage may be as much as $50 billion, though it is hard to know at such an early stage."
 
In explaining these donations (and demanding more), the article in the url below argues that local corporations have a duty to donate funds to the clean-up effort because they, themselves, had received large amounts of funds (e.g., tax relief, startup funds, etc.) previously. In other words, the article suggests these companies have an obligation to "repay" any benefits they received to conduct business in the area:
 
"As Houston recovers, its business community should feel especially compelled to help. That is partly because Houston and the surrounding area, as well as the state of Texas, have been generous to big business in recent years, showering companies with tax breaks, subsidies and other perks in an effort to keep them happy and create new jobs. Houston has benefited from the presence of large corporations, adding thousands of jobs and becoming one of the fastest-growing cities in America. But those companies have benefited, too — sometimes to the tune of hundreds of millions of dollars."
 
This is an unhelpful representation of the idea of "corporate citizenship." Although the money being donated by the companies can be described as charity, it is not correct to use the same term to describe the money those same companies received. They were not altruistic handouts, but incentives that were offered because those companies were in demand. The battle to secure a second Amazon HQ currently underway here in the U.S. will further demonstrate the lengths local governments are willing to go to attract big businesses:
 
"The donations announced for Harvey relief are generous by the standards of corporate philanthropy. Some of the donations are smaller, though, than the amounts many companies have gotten from the region's generous economic development programs."
 
I believe that companies absolutely should donate funds to help with the cleanup, but not for the reason stated in the article. It has nothing to do with 'paying back' the benefits they received in the past. Presumably, the companies have already delivered on whatever the quid-pro-quo was for them to receive those payments in the first place. Instead, corporations should donate because they have a stake in rebuilding the communities directly affected by the hurricane. They want those communities to recover as fast as possible because it will help them return to business as fast as possible. In other words, the reason for them to donate is a forward-looking argument (we have a direct stake in the future of these communities), rather than a backward-looking argument (we owe something from the past to those communities). The difference is the difference between a mainstream argument for CSR and the argument underpinning strategic CSR.
 
Take care
David
 
 
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/


Will Big Business Repay Houston's Generosity
By Kevin Roose
August 31, 2017
The New York Times
Late Edition – Final
B1
 

Friday, October 12, 2012

Strategic CSR - Olympics

Written in the run-up to London’s recent Olympics, the article in the url below awards gold, silver, and bronze medals to those corporate sponsors who are accused of most “greenwashing the Olympics” (http://www.greenwashgold.org/):

“Rio Tinto, the global mining company, has been named as early front-runner for the Greenwash Gold award for the worst Olympic sponsor, with BP, the oil and gas multinational, in second place and Dow Chemical third.”

The activists have a pretty good case that the organizers are compromising the Olympic values and ideals by taking so much money from these firms:
  • Rio Tinto is providing the metals to be used in the Olympic medals from its mines in Utah, even though local residents have complained about the pollution these mines produce.
  • BP has been named a “Sustainability Partner” to the Games, in spite of its questionable environmental track record.
  • Dow Chemical is still being hounded to acknowledge formally full responsibility for Union Carbide’s role in causing the Bhopal tragedy (Dow merged with Union Carbide in 1999).

What I found surprising was the lengths the local organizers went to in order to accommodate their sponsors:

“Olympic sponsors will avoid paying up to $942 million in tax as venues will be treated like offshore havens during the Games … . A report by Ethical Consumer claimed that under new tax rules ushered in as part of “Team Great Britain’s” winning Olympic bid, corporate partners like Coca-Cola, McDonald’s and Visa were given a temporary exemption from corporation tax as “non-resident” companies from March 30 to November 8. The new rules also reportedly mean foreign employees working for the companies do not have to pay income tax in the UK.”


Have a good weekend.
David


Instructor Teaching Site: http://www.sagepub.com/strategiccsr/
The library of CSR Newsletters are archived at: http://strategiccsr-sage.blogspot.com/


Greenwashing the Olympics
By Daniel Nelson
July 4, 2012
CorpWatch Blog

Monday, November 10, 2008

Strategic CSR - Union Carbide

The article in the url below describes how the gas leak that occurred in Bhopal, India almost 25 years ago has still not been cleared up. As a result, the disaster continues to generate negative headlines for Union Carbide (and Dow Chemicals, which bought Union Carbide in 2001) on the front page of the NYT (Issues: Human Rights, p234):

“Hundreds of tons of waste still languish inside a tin-roofed warehouse in a corner of the old grounds of the Union Carbide pesticide factory here, nearly a quarter-century after a poison gas leak killed thousands and turned this ancient city into a notorious symbol of industrial disaster.”

Putting aside any arguments of moral responsibility, it is amazing that a firm like Dow does not just pay what it takes to make this problem go away (Chapter 1: A Rational Argument for CSR, p17):

“The toxic remains have yet to be carted away. No one has examined to what extent, over more than two decades, they have seeped into the soil and water … Nor has anyone bothered to address the concerns of those who have drunk that water and tended kitchen gardens on this soil and who now present a wide range of ailments, including cleft palates and mental retardation, among their children as evidence of a second generation of Bhopal victims.”

Over the summer, the Supreme Court delivered a decision on the 1989 Exxon Valdez case. Both that case and the Bhopal disaster reflect poorly (to say the least) on the strategic decisions taken by the executives of both companies. At least, however, Exxon has accepted some degree of responsibility for its role in the Valdez oil spill.

Take care
Dave

Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
http://www.sagepub.com/Werther

Decades Later, Toxic Sludge Torments Bhopal
By SOMINI SENGUPTA
1858 words
7 July 2008
The New York Times
Late Edition - Final
1
http://www.nytimes.com/2008/07/07/world/asia/07bhopal.html

Monday, March 24, 2008

Strategic CSR - 100 Best Corporate Citizens List

The press release in the url below presents some interesting insights into the latest CRO Magazine (previously Business Ethics Magazine) list of “100 Best Corporate Citizens” (http://www.thecro.com/node/615), which has been published annually since 2000 (Issues: Auditing CSR, p94):

“The list's methodology for 2008 includes two significant updates. First, CRO changed rating agencies, switching from KLD Analytics to IW Financial. In contrast with KLD's interview-and-questionnaire-based method, IW Financial bases rankings solely on publicly-available data and uses its set of patented technologies to do the analysis. Second, the 2008 100 Best Corporate Citizens rankings are limited to the Russell 1000 …. In previous years, the rankings also included the Domini 400 companies, which include many mid-cap and small-cap firms, and resulted in a perceived bias in favor of the lower-cap enterprises.”

Another change in publishers, combined with the change in source data, appear to have moved the 100 Best list in a very positive direction, even though the churn makes it hard to compare across years and some controversial picks remain:

“Unchanged is the controversy surrounding the list, which inevitably accompanies any attempt to rank corporate social responsibility. Questions have already arisen about the inclusion of Monsanto (over child labor in India), Coca-Cola (over ground-water depletion), and Dow (over its Union Carbide legacy in Bhopal.)”

The CRO press release announcing the release of the list can be accessed at: http://www.csrwire.com/News/11126.html

Take care
Dave

Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
http://www.sagepub.com/Werther


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