Strategic CSR - AIDs

The article in the url below highlights recent developments by corporations in South Africa, such as the mining company Anglo American, to deal with AIDs infections among its employees. The goal is twofold—to prevent as many employees as possible from becoming HIV+, while helping provide the support and treatment necessary for those who are infected:

 

“Bosses receive a daily e-mail that shows, statistically speaking, ‘which is the safest mine to have sex’, says John Standish-White, an Anglo executive and a champion of its AIDS policy. Managers are judged by it. There is even a trophy for the mine with the lowest score. Any employee who tests positive for HIV is offered antiretroviral drugs paid for by Anglo. So the 17% of Anglo’s South African staff with HIV can live a normal life. The firm’s big push now is to slow down or stop new infections.”

 

In response to the firm’s proactive efforts, 80% of all employees have now been tested and the issue of AIDs is openly-discussed:

 

“The results of all this were better than anyone dared to hope. Free drugs gave workers an incentive to get tested, so many did. Thanks to lobbying by activists and improvements in technology, the price of drugs meanwhile plummeted from roughly $10,000 per person per year in the late 1990s to as little as $100 today. Drug firms made their medicines simpler to take: a pill or two a day instead of lots. Corporate AIDS programmes are starting to pay for themselves by cutting absenteeism and staff turnover, not to mention improving morale. Anglo’s Dr Brink talks of ‘turning a disaster into something we could manage.’”

 

This approach has affected the overall relationship the firm has with its employees. In short, in relation to its employees, the firm now does not see its responsibility (or self-interest) as confined to the workplace:

 

“The fight against AIDS has subtly changed the relationship between firms and their workers. Before AIDS, a mine boss at Anglo would worry about rockfalls but feel it none of his business if an employee took risks at home. These days he takes a paternalistic interest in the sex lives of his workers. … Since Anglo started monitoring its workers’ health more closely it has discovered other problems, such as rising obesity and hypertension, and started to tackle them.”

 

At Anglo American, at least, the business argument for doing so is easy for the firm to make:

 

“Mining firms have a strong incentive to keep employees healthy, because they are hard to replace. Miners become familiar with the unique geology of the mine where they work. Staff turnover is only 2.4% a year at Anglo. Also, its record in tackling HIV may help it secure the ‘social licence’ to mine in other regions with virulent diseases, such as malaria.”

 

Take care

David

 

David Chandler & Bill Werther

Strategic Corporate Social Responsibility: Stakeholders, Globalization, and Sustainable Value Creation (3e)

© Sage Publications, 2014

 

Instructor Teaching and Student Study Site: http://www.sagepub.com/chandler3e/

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

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

 

 

Sex, drugs and hope

April 13, 2013

The Economist

68

http://www.economist.com/news/business/21576083-how-big-business-fought-aids-south-africa-sex-drugs-and-hope

 

Strategic CSR - Pharmaceuticals

I always find it fascinating that the pharmaceutical industry has such a bad reputation (Issues: Patents, p252). How is it that firms that specialize in producing drugs that save lives, reduce human misery and suffering, and increase longevity and general wellbeing can be criticized from so many quarters for their lack of social responsibility?

Why is it that:

“There is a special duty when you are selling medicine as opposed to pantyhose or hubcaps,”

but also that:

“On the one hand, we don't like it that markets are harsh and unjust, … But on the other hand, it's the power of the market that creates the therapies in the first place”?

The article in the url below goes some way to redressing this disconnect by outlining some of the good work being done by pharmaceutical firms and many of the challenges that prevent more rapid progress. Two aspects of the story jumped out at me: First, how much is being done and how far the industry has progressed toward responding to its critics. For example:

“Efforts to deliver cures to the world's poorest regions range from new research initiatives to Big Pharma donations of medicine. Last November, the World Health Organization unveiled an alliance with six firms that pledged to donate drugs for neglected tropical diseases. … Among the contributions was an unlimited supply of leprosy treatments from Novartis, and up to 200 million tablets a year from Johnson & Johnson to combat intestinal worms in children. … GlaxoSmithKline is sharing more than 800 of its patents with other companies working to find treatments for neglected tropical diseases. The company has also cut prices for more than a dozen drugs sold in the least developed countries -- such as Rwanda, Ethiopia and Cambodia -- to no more than 25% of the developed-world price. The treatments cover conditions that include asthma, malaria and hepatitis B.”

And, second, the prominent role of the Bill & Melinda Gates Foundation, which is mentioned in multiple examples in the article as partnering with specific firms to make a significant impact:

“Many such programs are modeled after alliances between drug companies, governments and non-profit organizations that have expanded affordable access to HIV/AIDS treatments in poor countries. Perhaps the most ambitious effort has been in Botswana, which in 2001 joined forces with Merck and the Bill & Melinda Gates Foundation to bring drugs to the impoverished African nation. Now 90% of Botswana's HIV/AIDS patients receive treatment, says Merck, compared with just 5% when the program began.”

No doubt many (if not all) of these initiatives are not widely known, however, and pharmaceutical firms will continue to score poorly in public perceptions of their social responsibility.

Have a good weekend.

David

Bill Werther & David Chandler

Strategic Corporate Social Responsibility: Stakeholders in a Global Environment (2e)

© Sage Publications, 2011

http://www.sagepub.com/strategiccsr2e/

Instructor Teaching Site: http://www.sagepub.com/strategiccsr/

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

Profits and Social Responsibility: Chastened Drug Makers Step Up Efforts to Bring Affordable Medicines to Poor Countries

February 10, 2011

Knowledge@Wharton

http://knowledge.wharton.upenn.edu/article.cfm?articleid=2710

Strategic CSR - De Beers

The article in the url below presents a case study of the positive impact that De Beers has had in Africa, in general, and Botswana, in particular:

“There is also no question, though, that Botswana was greatly aided by something else: De Beers's own sense of -- to use the current term of art -- corporate social responsibility.”

The author argues that, unlike many other firms that have extracted Africa’s resources (and continue to do so today), De Beers sought to build sustainable operations by building the local infrastructure that would also ensure the country’s development:

“Practically from the start, it entered into a 50-50 joint venture with the government; about a decade ago, it also sold the government a 15 percent stake in the company. … It has also built roads, hospitals and schools in Botswana; worked to help the country deal with H.I.V. and AIDS; and been involved in and paid for a hundred other things that have helped make Botswana an African success story.”

The author is quick to point out that this was not a charitable act by De Beers, but helped ensure the firm also continued to succeed:

“Botswana's citizens need roads -- but so does De Beers, to transport its diamonds. De Beers needs a healthy work force, so its emphasis on H.I.V. awareness and treatment is clearly in its self interest. Indeed, a more prosperous Botswana helps De Beers in every way imaginable, not least by providing a stable environment in which it can do business.”

The remainder of the article tracks the firm’s evolution in relation to the development of the diamonds industry and the role of the current CEO (appointed in 2006) in shaping the firm’s CSR profile:

“In the two years he's been the chief executive, Mr. Penny has become a proselytizer for what he likes to call ''beneficiation'' -- which is a fancy word for doing well while doing good. … He went on to say that every company doing business in Africa needed to practice this kind of enlightened stewardship if it hoped to succeed over the long haul.”

Take care
Dave

Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006

Diamonds Are Forever In Botswana
By JOE NOCERA
1769 words
9 August 2008
The New York Times
Late Edition - Final
1
http://www.nytimes.com/2008/08/09/business/worldbusiness/09nocera.html

Strategic CSR - Zimbabwe

The article in the url below outlines the difficult decisions faced by firms operating in a country when world opinion moves in favor of sanctions and pressure on multi-nationals to withdraw (Issues: Cultural Conflict, p160; Companies Trying to Do CSR Well: Shell, p302):

“Doing business with Zimbabwe at a time when the world's media are showing the violent suppression of dissent can damage their reputations - as many found during the apartheid years in South Africa. Yet withdrawal could hurt ordinary people while having little impact on the government - and might delay recovery when democracy is eventually restored.”

The article cites a number of examples of western firms that provide meaningful employment to hundreds of Zimbabweans. The UK supermarket, Waitrose, for example, imports fish that are fair- trade certified from its Zimbabwe supplier. This firm:

“… employs 450 people, paying them "substantially more" than the minimum basic wage, according to Waitrose. They are also given other cash allowances, free lunches and HIV/Aids support, with medical insurance and membership of pension schemes for permanent employees.”

The article also raises the difficult case of the mining firm Anglo-American, which is currently investing in Zimbabwe to establish a platinum mine. As one source is quoted as saying, withdrawal represents:

"gesture politics . . . If Anglo American pulled out, their shoes would be filled very quickly by the Chinese. The precedent was set in Sudan, where the Chinese moved in after the imposition of western sanctions."

Ultimately, continued involvement legitimizes the current administration and, while life remains bearable for ordinary people, there is little hope of bottom-up regime change. On the other hand, however, withdrawal can cause real pain and can hamper recovery once change occurs. The ‘best’ decision is not apparent and, unfortunately, media coverage tends toward the emotional, rather than helping make the ‘best’ decision for those most affected—in this case, the Zimbabwean people.

Take care
Dave

Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006

Mangetout and Mugabe; Multinationals wrestle with their Zimbabwe role
By John Willman, Business Editor
1469 words
5 July 2008
Financial Times
Asia Ed1
10
http://www.ft.com/cms/s/0/6b315526-49fb-11dd-891a-000077b07658,dwp_uuid=70bd196c-ffc3-11dc-825a-000077b07658.html

Strategic CSR - American Apparel

The article in the url below demonstrates the limits for firms that rely too heavily on the market segment of ethical consumers (Chapter 2: CSR: Do Stakeholders Care? p25):

“In the beginning, American Apparel put a "sweatshop free" label on its t-shirts. But sex turned out to be a better sell than good labor practices. Lessons in the limits of altruism.”

The pessimistic (or realistic, depending on your perspective) view of human nature held by Dov Charney, America Apparel’s CEO, is that “to get what you want, you must appeal to people's self-interest, not to their mercy.” The article argues that the success of Charney’s approach, at least in relation to the teenage customer to whom American Apparel seeks to appeal, lies in understanding the gap between people’s stated intentions and actual practice:

“A whopping majority of American shoppers may consider themselves environmentalists, but, according to the Journal of Industrial Ecology, only 10% to 12% "actually go out of their way to purchase environmentally sound products." Similarly, Brandweek reported on a survey that found that even among consumers who called themselves "environmentally conscious," more than half could not name a single green brand.”

The article argues that, instead, successful ethical retailers rely on other research that suggests people are much happier treating themselves to luxury items, while at the same time feeling like they are doing something virtuous:

“Perhaps this is why many big companies and brands are not so much changing their products as adding new alternatives to their existing product mixes, or carving a small donation to charity out of their profit margins. Pepsi-Cola is testing an all-natural version of its flagship drink called Pepsi Raw, and Clorox has launched an eco-friendly line of cleaning products. The Bono-promoted (Product) Red initiative brands existing products that dedicate a portion of the purchase price to the Global Fund to Fight AIDS, Tuberculosis, and Malaria. There's even a (Product) Red version of the iPod.”

Take care
Dave

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

Sex vs ethics
Fast Company Magazine
It's a dilemma for investors who want hefty returns and a clean green conscience: Can you own Big Oil and still feel good in the morning?
From: Issue 124 | April 2008 | Pages 54-56 | By: Rob Walker
http://www.fastcompany.com/magazine/126/sex-vs-ethics.html

Strategic CSR - Product (Red)

The press release in the url below contrasts the cynicism it says people feel towards the idea “that we can help poor victims of AIDS in Africa by going shopping” with the notable success of Product (Red) (http://www.joinred.com/):

“Then again, there’s this number: $110 million. That’s the amount of money that (Red) partners have generated for the Global Fund To Fight AIDS, Tuberculosis and Malaria to provide AIDS treatment in Ghana, Rwanda, Swaziland and Lesotho.”

Product (Red) was launched in January 2006 by, among others, Bono and the range of products now available is extensive:

“… now you can buy (Red) phones from Motorola, (Red) iPods from Apple, (Red) greeting cards from Hallmark, (Red) laptops from Dell, (Red) shoes from Converse and (Red) watches from Emporio Armani.”

In spite of this success, however, the author outlines three reasons for concern that expose the limitations of such campaigns. The first reason argues for greater transparency among the participating firms:

“… if all these companies want credit for supporting a good cause, we ought to be able to know how much financial support they are actually delivering.”

The second reason questions whether consumption provides a sustainable solution to any social problem:

“But Americans already consume way too much stuff. The message of Product (Red) is that we can buy that new cell phone or wrist watch and feel good about it because we are helping victims of AIDS.”

And, the final reason raises the potential that Product (Red) might result in an overall decrease in social engagement:

“But what if, after buying that Gap T-shirt, consumers feel they’ve done their part? What if Product (Red) becomes a substitute for either activism or charitable giving?”

Take care
Dave

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

Better (Red) Than Dead
Marc Gunther
CSRwire Weekly News Alert
August 5, 2008
http://vcr.csrwire.com/node/9680

Strategic CSR - Patents

The article in the url below profiles Yusuf Hamied, the CEO and largest shareholder of Cipla, a firm in India that breaks pharmaceutical patents by copying drugs and selling them at vastly reduced prices (Issues: Patents, p253). This business model has turned Cipla into one of India’s largest firms and “the largest supplier of antiretroviral drugs in the world”:

“To his supporters, Hamied has saved countless lives by making medicines affordable. But to his critics - above all the large western pharmaceuticals who first developed the drugs - he is a ''pirate'', an opportunist who has exploited others' intellectual property to swell his own profits. In the process, they say, he is undermining investment in future medicines, including the next generation of HIV therapies.”

The business model is extended across the board to hundreds of different kinds of drugs:

“We have more products than any (drug) company in the world,'' Hamied says. ''More than a thousand for humans, and a hundred for animals. That's because they are, in inverted commas, 'copy products'.”

Rather than a threat to the large western pharmaceutical firms, however, Hamied argues that he wants to collaborate with them to broaden the markets to which they can supply and for which there is overwhelming demand for pharmaceutical products:

“Hamied argues that western drug companies should - at best in exchange for modest royalties - allow generic producers to compete by making their medicines available immediately at the lowest possible cost, giving access to many more patients who would not otherwise be able to buy them.”

Needless to say, Cipla has run into significant resistance:

“''The first six months were absolute hell, as big pharma tried to run us down,'' [Hamied] says. Richard Sykes, head of Glaxo, denounced Hamied as a ''pirate'' and described the quality of Indian generic drugs as ''iffy''. Hamied fired back, saying that the company was a ''global serial killer'' for charging such high prices.”

Take care
Dave

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

The man who battled big pharma.
By ANDREW JACK
2829 words
29 March 2008
Financial Times
Surveys MAG1
Page 14
http://us.ft.com/ftgateway/superpage.ft?news_id=fto032820081826526065

Strategic CSR - Fashion

The slide show put together by Businessweek in the url below highlights the extent to which social issues are beginning to surface in the fashion industry (Issues: Auditing CSR, p94; Advertising, p151; Brands, p153; Cultural Conflict, p160; Sex, p268):

“Fashion used to be the epitome of vanity and conspicuous consumption. But now, a number of designers are espousing causes, such as erasing global poverty and AIDS, and producing clothing that drives emerging nation development and combats worker abuses.”

The poster child for such efforts is Bono’s Product Red:

“Partner companies include Gap, which is selling a number of Red-branded products including an African cotton T-shirt made in Lesotho; Converse, which is offering a limited-edition sneaker made of African mud cloth; and Giorgio Armani, which plans to expand its Product Red line to include fragrances and jewelry this spring.”

But, a number of other designers and clothing firms are also featured:

“American Apparel trumpets its “vertically integrated” manufacturing, which consolidates every stage of production into its factory in downtown Los Angeles. “Worker-positive” conditions are bolstered by subsidized lunches, free English classes, low-cost health insurance, and on-site massages. The company recently launched a Sustainable Edition line of T-shirts made with organic cotton and has pledged to convert more than 80% of its cotton consumption to sustainable cotton over the next several years.”

To the extent that these products are demand-driven, the increasing expectations placed on businesses to solve social problems are a positive. To the extent, however, that they are supply-driven, with little consumer support, they are likely to be short-lived. One year after the publication of this article, it would be interesting to see sales figures associated with each of the products and firms featured here.

Take care
Dave

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

Business Week Online
Insider Newsletter
Friday, January 12, 2007
********************
GUILT-FREE FASHION
Humanity Is Now in Fashion
A new breed of designer is looking at clothing as a way to help address social ills
By Kerry Miller
http://newsletters.businessweek.com/c.asp?id=643684&c=c55a2ee820194f0f&l=6

Strategic CSR - Social Marketing

The article in the url link below demonstrates clear boundary constraints on the ability of the market to deliver social value (Issues: Profit, p200). The article argues that, at least in terms of the most effective means of distributing malaria nets to those who need them most, handing them out for free is a far superior means of distribution:

“In doing so, Dr. Kochi [the blunt new director of the World Health Organization's malaria program] turned his back on an alternative long favored by the Clinton and Bush administrations -- distribution by so-called social marketing, in which mosquito nets are sold through local shops at low, subsidized prices -- $1 or so for an insecticide-impregnated net that costs $5 to $7 from the maker -- with donors underwriting the losses and paying consultants to come up with brand names and advertise the nets.”

Past experience with social marketing suggests, in areas where there is little or no existing market infrastructure, trying to impose a market solution is ineffective:

“In 2000, a world health conference in Abuja, Nigeria, set a goal: by 2005, 60 percent of African children would be sleeping under nets. By 2005, only 3 percent were.”

The example presented in the article is compelling:

“Maendeleo, a village of about 140 mud-walled shacks with tin roofs, was part of a five-year study of 40 health districts. When it started in 2002, the only nets were those for sale in small shops, Dr. Olumese said, and only about 7 percent of people had them. Social marketing was introduced by Population Services International, a large aid contractor. That increased coverage to about 21 percent by early 2006. Then, late last year, the health ministry got a big grant from the Global Fund to Fight AIDS, Tuberculosis and Malaria that allowed it to hand out 3.4 million free nets in two weeks. Coverage rose to 67 percent, and distribution became more equitable. … Deaths of children dropped 44 percent. It also turned out to be cheaper.”

Take care
Dave

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

Distribution of Nets Splits Malaria Fighters
By REUBEN KYAMA and DONALD G. McNEIL Jr.; Reuben Kyama reported from Maendeleo, Kenya, and Donald G. McNeil Jr. from New York.
1280 words
9 October 2007
The New York Times
Late Edition - Final
1
http://www.nytimes.com/2007/10/09/health/09nets.html