Strategic CSR - Greenwash

The articles in the two urls below offer contrasting approaches by different countries to the issue of preventing greenwash in finance. In the first article, the Swiss government (rather optimistically) is happy to trust the firms in its finance industry to self-regulate:

"Switzerland's finance sector can regulate its own members when it comes to combating the miss-selling of sustainability-themed investment products, the government said. The Federal Council had given banks, insurers and other finance firms until August to come up with an effective self-regulation framework on greenwashing."

In contrast, and employing a modicum of commonsense, the Australian government is proposing to introduce a new labeling system that will add substance to the ambiguous meaning of sustainable:

"The Australian government … will establish labels and disclosures for investment products marketed as 'sustainable,' including funds run by the superannuation industry, after a public consultation in early 2025, according to a sustainable finance framework released on Wednesday. The plan also calls for large businesses and financial firms to incorporate climate disclosures based on the Australian Accounting Standards Board's guidelines, which are due to be finalized in August."

The key to the difference is in the article headlines – while the Swiss will allow finance firms to "police themselves," the Australian government is planning to "crack down with new regulations." I wonder which approach will be the most effective in reducing the amount of misleading information and behavior that pervades all things sustainable?

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/

Swiss Say Finance Firms Can Police Greenwashing Themselves

By Bastian Benrath

June 19, 2024

Bloomberg

https://www.bloomberg.com/news/articles/2024-06-19/swiss-say-finance-firms-can-police-greenwashing-themselves

Australia Cracks Down on ESG Claims with New Regulations

By Ishika Mookerjee

June 19, 2024

Bloomberg

https://www.bloomberg.com/news/articles/2024-06-19/australia-cracks-down-on-esg-investing-industry-with-new-rules

 

Strategic CSR - Climate transparency

The article in the url below reports on efforts by the UK government to increase its oversight of companies' sustainability efforts:

"The U.K. said that companies need to report the financial impacts of climate change on their businesses within the next five years, becoming the first country to make the disclosures mandatory as investors and governments demand corporations curb their greenhouse gas emissions."

Although this may seem obvious, it is actually an important step forward:

"Chancellor of the Exchequer Rishi Sunak, the country's equivalent to a U.S. Treasury secretary, said Monday that the rule would apply to most of the nation's economy, including listed companies, banks, large private businesses, insurers, asset managers and regulated pension funds."

This policy came directly from the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD, https://www.fsb-tcfd.org/, Chair Michael Bloomberg), an organization that was established in 2015 "to promote more informed decisions by companies":

"The TCFD says companies should disclose in their financial reports how climate change could increase or reduce sales, among other issues. As of this year, more than 1,500 organizations have expressed their support for the TCFD's recommendations, a more than 85% increase from last year, according to the TCFD's status report published late last month. The report said 42% of companies with a market capitalization above $10 billion disclosed at least some information in line with the TCFD."

The work of the TCFD is global, with implications for regulatory systems far beyond the UK:

"Investment houses that offer environmental funds welcomed the U.K.'s adoption of the TCFD. … The U.K.'s move comes as regulators in the U.S. have voiced support for the TCFD. Last month, Linda Lacewell, superintendent of the New York State Department of Financial Services, recommended that banks and insurers report through the TCFD. The DFS regulates around 1,500 banks, 1,800 insurers and other financial groups, with assets exceeding $7 trillion."

Together with the UK, other countries in the EU are moving further and faster than most:

"Like the European Union it recently exited, the U.K. has a net-zero emissions goal by 2050. To help meet that goal, Mr. Sunak also said the country would issue its first green bond next year under its new climate change agenda, following its European peers. Money raised by issuing a green bond is earmarked for climate and environmental projects. In early September, Germany raised 6.5 billion euros ($7.12 billion) via its debut green bond. The eurozone's green sovereign bond market, which the U.K. isn't part of, is still relatively small at less than around 1% of the region's overall bond market, but it is expanding since France's first green bond in January 2017."

There is additional reporting on this issue in the article in the second url below:

"The TFCD standards, to which the U.K. decision will lend weight, cover four main areas: governance, risk management, strategy and key metrics. While the disclosures are largely qualitative, their publication would likely push companies to incorporate climate risks into the financial numbers too. Big entities will need to comply first, followed by smaller ones over five years. By 2022, the U.K. government expects climate-risk reporting from all companies listed on the main market of the London Stock Exchange (excluding a high-growth submarket), half of its large private companies, 75% of U.K.-authorized asset managers and nearly all of its banks, insurers and large pension funds."

Most notably, the UK government felt compelled to intervene formally because previous efforts at voluntary compliance were not working:

"Progress on voluntary disclosure has been slow, even though over 1,500 companies and organizations 'support' [greater transparency on this issue]."

Take care

David

David Chandler

Strategic Corporate Social Responsibility: Sustainable Value Creation (5e)

© Sage Publications, 2020

Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler5e 

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

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

U.K. Requires Companies to Report on Climate Change by 2025

By Dieter Holger and Emese Bartha

November 9, 2020

The Wall Street Journal

https://www.wsj.com/articles/u-k-requires-companies-to-report-on-climate-change-by-2025-11604964183

U.K. Tries Climate Reports

By Rochelle Toplensky

November 18, 2020

The Wall Street Journal

Late Edition – Final

B14

https://www.wsj.com/articles/the-u-k-s-experiment-with-climate-reporting-is-worth-watching-11605610427

 

Strategic CSR - Chocolate

This is the last CSR Newsletter of the Fall semester. Happy Holidays and I will see you in the New Year!

We know we are finally getting serious about obesity and related health issues when we raise the prospect of taxing chocolate:

"In the U.K.—where people eat more chocolate per head than anywhere but Russia—a government report shows the industry has made little progress toward a 2020 deadline to cut sugar. That has prompted health campaigners to call for a tax on chocolate similar to a levy on sugary soft drinks, which in several countries has reduced consumption or propelled reformulation."

The possibility of regulation has arisen due to long-standing efforts by confectionary makers to reduce the amount of sugar in their products that initially made progress, but have recently stalled:

"Four years ago, England's public-health agency said it wanted the food industry to help reduce obesity by voluntarily reducing overall sugar by 20% between 2015 and 2020 in products including chocolate, breakfast cereal, yogurt, spreads and desserts. But a report published by the agency last month showed sugar reduction of 3% in 2019 from 2015 levels. Chocolate lagged behind other foods, with retailers and branded manufacturers cutting sugar by 0.4% per 100 grams over the past five years. The out-of-home sector, which includes coffee chains and sandwich shops, reported a 10.7% rise in sugar content per 100 grams of chocolate over the same period."

This approach of taxation has worked with other unhealthy foods and drinks, so no reason not to think it could also work with chocolate:

"The burgeoning scrutiny presents new risks and challenges for global chocolate companies such as KitKat maker Nestlé SA and Toblerone-owner Mondelez International Inc., with the U.K.'s regulation on alcohol, smoking and plastic waste historically influencing policy elsewhere."

The UK is becoming increasingly strict on the ingredients in such products, as well as companies' abilities to advertise them to consumers:

"The U.K. recently began soliciting views from companies and the general public on its proposal to ban any online advertising for food and drinks high in salt, fat and sugar—including chocolate. The move would extend a ban announced this summer on advertising such foods online or on television before 9 p.m. A separate proposed ban on 'buy one, get one free' promotions for these foods could reduce U.K. sales by more than £3 billion, says research firm IRI."

But, according to the chocolate makers, sugar is an integral ingredient in their products:

"The average bar of chocolate is roughly half sugar. Reducing that amount affects texture, size and how quickly it melts. Sugar provides bulk; replacing it with artificial sweeteners—commonly used in drinks—doesn't work because their intensity means they are needed in far lower quantities. While drinks makers can top up volumes with water or juice, executives say there isn't an obvious substitute in chocolate."

Nevertheless, the appetite for regulation is growing:

"The U.S. Food and Drug Administration this year began requiring larger food companies to include an additional line for added sugar on nutrition labels. Smaller companies must comply by January. Mexico last month began requiring front-of-pack labeling describing the health hazards posed by products high in sugar, calories, salt and fat. Hershey Co. Chief Executive Michele Buck recently said the company was keeping a close eye on how consumers responded."

But, never give up hope. Luckily for us, science has been taking this issue seriously for many years and, despite the market failure of many confections containing sugar-alternatives, there is a natural substance that might offer a pathway forward:

"To slash calories as well as sugar levels, Tate & Lyle PLC is betting on allulose, a natural sugar found in figs and raisins that it is making from corn. Allulose tastes like sugar and adds bulk but passes through the body rather than breaking down into calories, said Abigail Storms, the ingredients company's head of sweeteners. The FDA recently said allulose doesn't have to be treated as a sugar or an added sugar on pack labels, and confirmed its calorie content is far lower than table sugar."

Take care

David

David Chandler

Strategic Corporate Social Responsibility: Sustainable Value Creation (5e)

© Sage Publications, 2020

Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler5e 

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

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

Chocolate Makers Struggle to Cut Sugar

By Saabira Chaudhuri

November 23, 2020

The Wall Street Journal

Late Edition – Final

B1

https://www.wsj.com/articles/chocolate-makers-are-having-a-hard-time-cutting-down-on-sugar-11605967201

 

Strategic CSR - Seatbelts vs. Face masks

The article in the url below presents a timely comparison between the introduction of seatbelts in the U.S. in the 1980s and the public discourse around face masks in the U.S. today:

"A legislator in New Hampshire called it constricting. A Michigan man said it messed up his look. A sailor in Massachusetts argued the government has no right to force him to wear it. Though they might sound familiar, those were not the refrains of people rebelling against face masks during the pandemic. Instead, they came from the seatbelt debates of the 1980s, another era when some Americans pushed back against rules meant to keep them safe."

As this quote suggests, the arguments over seatbelts in many ways mirror those over masks today:

"Capitals, legislative halls, petitions and radio shows were the stages for battle over state seatbelt laws, the first of which passed in 1984. Medical workers and police officers gave firsthand accounts of how people not wearing belts died in wrecks. Opponents wondered if it was safe to be strapped into a hurtling vehicle, or complained about discomfort and government overreach."

In particular, similar to many arguments in the U.S., the debates around seatbelts and face masks can be reduced to some concept of individual freedom:

"The fight over seatbelt laws in the United States was fraught with trying to strike a balance between individual and public interests. Those concerns have also been reflected in similar matters of health and safety, including vaccinations, helmet laws – and masks."

An argument that both seatbelts and masks have in common, therefore, is the state's right to compel specific behavior. A difference between the two focuses on the harm that is being committed, whether to the individual themselves or to others:

"Alberto Giubilini, a public health ethics scholar who has compared the arguments over seatbelt laws with those of vaccination opponents, noted that seatbelts and helmets are mostly meant to protect an individual, while vaccinations and face masks are also intended to prevent harm from spreading to others."

Although this distinction is somewhat debatable (since seatbelts prevent more serious injuries that increase healthcare costs for all), different areas of the country respond in different ways to these arguments about degrees of individual freedom. As a result, and due to the U.S. federal system where most legislative powers reside with the individual states, the introduction of seatbelt laws has moved at different speeds and to varying degrees across the country:

"Since 1984, when New York became the first state to have a seatbelt law, they have continued to be an uneven patchwork. Some have made it a primary violation, meaning officers can pull over a driver only for not wearing a seatbelt. Others made it secondary, meaning a driver stopped for another reason can also be given a seatbelt citation. Only 31 states extend the requirement to adults in the back seat."

The article goes into detail about the history of seatbelt legislation in three states – Massachusetts, Michigan, and New Hampshire, which remains "the only state that still does not have a mandatory seatbelt law," in spite of the obvious benefits of wearing one:

"In 2018, according to the National Highway Traffic Safety Administration, seatbelts saved about 14,955 lives of people ages 5 and older nationwide. If everyone involved in crashes had worn seatbelts, an additional 2,549 people could have been saved, it said."

Take care

David

David Chandler

Strategic Corporate Social Responsibility: Sustainable Value Creation (5e)

© Sage Publications, 2020

Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler5e 

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

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

Face Mask Debate Recalls Seatbelt Wars of the 1980s

By Christine Hauser

October 17, 2020

The New York Times

Late Edition – Final

A4

https://www.nytimes.com/2020/10/15/us/seatbelt-laws-history-masks-covid.html

Strategic CSR - Meat

The article in the url below raises the possibility of extending the idea of a Pigovian tax (a tax on an activity that causes a negative consequence – i.e., a sin tax) to eating meat. In other words, meat would be taxed as a 'sin' in the same way that cities and states are beginning to tax a range of products, from plastic bags (e.g., Strategic CSR - Kenya) to sugar (e.g., Strategic CSR – CSR Threshold):

 

"Meat could be a target for higher taxes given criticism of the industry's role in climate change, deforestation and animal cruelty. … The idea is still its infancy and faces a lot of opposition from farming groups, but it's emerging as a trend in Western Europe. … If taxes gain traction, it could encourage more people to switch to poultry or plant-based protein and help drive the popularity of meat substitutes."

 

Such a tax has been advanced as a way to address animal welfare, as well as reduce meat consumption:

 

"In Germany, some politicians have proposed raising the sales tax on meat products to fund better livestock living conditions. A poll … showed a majority of Germans, or 56.4%, backed the measure, with more than a third calling it 'very positive' and some 82% of voters for the environmentalist Greens in favor."

 

This article coincides with another report from the IPCC recently on climate change and the land (https://www.ipcc.ch/report/srccl/), documenting the waste and damage associated with our current farming/land-use methods:

 

"The loudest argument against meat at the moment is not based on health but climate change. In a report this month, the United Nations said agriculture, forestry and other land use contributes about a quarter of greenhouse emissions."

 

In the face of the scale of the problem, a tax on red meat seems as though it will not get us all the way to there from here. The principle is important, however. If you believe that the market is the most effective means of allocating scarce and valuable resources (which I do), then sin taxes are the way to account for negative externalities in the pricing of products. Get the pricing right, and demand/supply will balance at the 'appropriate' level. In my opinion, this lifecycle pricing (together with technological innovation) is the only way we will combat climate change and have some hope of preserving a planet on which we can live.

 

Take care

David

 

David Chandler

Strategic Corporate Social Responsibility: Sustainable Value Creation (5e)

© Sage Publications, 2020

 

Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler5e 

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

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

Red Meat Could Be the Next Sin Tax After Sugar, Fitch Says

By Olivia Konotey-Ahulu

August 13, 2019

Bloomberg Businessweek

https://www.bloomberg.com/news/articles/2019-08-13/red-meat-could-be-the-next-sin-tax-after-sugar-fitch-says

 

Strategic CSR - Amazon

The article in the url below details Amazon's attempts to make its supply chain more efficient by requiring its suppliers to limit their packaging:

 

"Amazon is pressuring brands to make their packaging more efficient, which has prompted vendors to make costly changes to their businesses or face fines. Since last fall, Amazon has told companies they must make packaging for thousands of larger products more compact and easier to open by Thursday. Eventually, Amazon wants every product it ships to meet similar standards, according to the company and its suppliers. In a letter to vendors, Amazon said the requirements will make packages more environmentally friendly."

 

As an indication of its growing purchasing power, it is increasingly able to enforce its requirements:

 

"The company has also been pushing brands to sell products in quantities and at prices that best fit its storage and delivery systems; brands that don't comply are being cut from Amazon's site."

 

My question, therefore, is: Is this an example of sustainability (which the CSR community would no doubt applaud) or is it an example of an overly-aggressive, dominant market power forcing suppliers to alter their practices irrespective of their interests/concerns? Or, is it both at the same time and do we care about the distinction?

 

The article reminded me of Walmart's efforts to squeeze costs out of its supply chain, for example by forcing laundry detergents to introduce concentrate products that are then, supposedly, diluted by the end customer when we put it in our laundry machines? By not shipping the extra water, Walmart (and its suppliers) saved millions of dollars in packaging and reduced fuel costs – savings that are not one-off, but are compounded year-on-year as the products in specific industries, and their supply chains, changed forever.

 

To me, this speaks to the confounding effect of altruism in the CSR debate. I go into length about this in the textbook in the discussion about voluntary vs. mandatory CSR. It seems to me that the most effective way to bring about change is to incentivize firms to engage in practices that are deemed to be beneficial. If the incentives are real, then the self-interest of the firm is automatically aligned with the broader societal (collective set of stakeholders) interest. But, in order for the incentives to be real, stakeholders have to truly care and reward those firms that engage in the desired practices and punish those firms that shun those practices.

 

That, in a nutshell, is the argument driving strategic CSR.

 

Happy Thanksgiving!

David

 

David Chandler

Strategic Corporate Social Responsibility: Sustainable Value Creation (5e)

© Sage Publications, 2020

 

Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler5e 

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

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

Amazon Pushes Brands to be Less Boxy

By Annie Gasparro

July 30, 2019

The Wall Street Journal

Late Edition – Final

B2

https://www.wsj.com/articles/amazon-pushes-brands-to-be-less-boxy-11564490849

 

Strategic CSR - Exxon

The article in the first url below explores the recent struggles of Exxon:

 

"Exxon faces a number of challenges, including investigations of its accounting and tax practices as well as lawsuits by cities and states seeking funds to pay for the effects of climate change. Its biggest problem is one the giant has seldom faced in its 148-year history: It isn't making as much money as it used to."

 

Up until 2008, Exxon was the largest publicly-traded firm in the world. Today, it is performing at a much lower level. Whether for political (sanctions), social (climate change legislation), or economic (lower profits) reasons, the firms is a shadow of its former self:

 

"In 2016, S&P Global Ratings stripped Exxon of the triple-A credit rating it held since 1930. It was one of only three companies to hold the distinction at that time, along with Microsoft Corp. and Johnson & Johnson . While Exxon once ranked as the world's largest company by market value, it was 10th as of June 30, less than half the size of Apple Inc."

 

Given the reality that a significant proportion of fossil fuel reserves will need to remain in the ground if we are to survive as a species, you have to think that Exxon (and CEO at the time, Rex Tillerson) is missing the bigger picture. While bad luck has played its part, strategic vision has also been lacking:

 

"As [oil] prices rose to all-time highs of almost $150 a barrel, Mr. Tillerson led the charge to chase more expensive prospects that could meet the world's thirst for crude. He looked to Canada's oil sands, natural gas fracking and even Russia's Arctic, all of which required higher prices to be profitable. Those efforts largely failed. Exxon's production has declined in the past five years, and the company has delivered lackluster financial results. Today, oil prices are around $74 a barrel. … its U.S. drilling business has lost money in 11 of the last 15 quarters."

 

While other energy companies are increasing their investment in low-carbon or alternative energies (Shell, for example, is investing heavily in natural gas), Exxon is doubling down on oil. As the price per barrel fluctuates, the extent to which the firm is exposed has become apparent. Moreover, the working assumption internally is that Exxon will be able to extract all of its known reserves, in direct contradiction to what climate science is telling us. The result is a sense that the firm has seriously misjudged the market:

 

"Shareholders haven't responded with enthusiasm. The price of crude is up about 60% in the past year, but Exxon shares are up less than 5%. … Meanwhile, rivals such as Shell, BP and Total have diversified outside of fossil fuels."

 

The article in the second url below suggests that at least Exxon understands it is losing the battle of perceptions:

 

"Exxon Mobil will donate $1 million to a campaign promoting a tax to curb emissions of planet-warming carbon dioxide to U.S. lawmakers and the American public. … The plan advocates for placing a fee on carbon emitted by companies, which would start at $40 per ton and rise gradually. Revenues from the tax would be returned to Americans in the form of regular, automatic dividend payments."

 

Although, $1 million might only be a rounding error for a firm the size of Exxon, and there is plenty of evidence to suggest the firm sees this move as a quid pro quo and has not significantly shifted its position:

 

"The final pillar of the plan calls for rolling back the Environmental Protection Agency's authority to regulate carbon emissions and repealing rules like President Barack Obama's Clean Power Plan, which the Trump administration is already in the process of dismantling."

 

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/

 

 

Exxon Is Running Low

By Bradley Olson

July 14-15, 2018

The Wall Street Journal

Late Edition – Final

B1

https://www.wsj.com/articles/exxon-once-a-perfect-machine-is-running-dry-1531490901

 

Exxon Mobil pledges $1 million to campaign to promote carbon tax

By Tom DiChristopher

October 9, 2018

CNBC

https://www.cnbc.com/2018/10/09/exxon-mobil-pledges-1-million-to-campaign-to-promote-carbon-tax.html

 

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.

 

The debate between voluntary and mandatory compliance is central to promoting CSR. Whether you think more socially-responsible behavior can be imposed or coerced, as opposed to incentivized, speaks volumes as to where you stand on many CSR issues. With this in mind, the new year brought a raft of new laws in cities and states across the U.S. (and overseas)—all related to topics that are of concern to the CSR community. The article in the first url below chronicles some of these new laws:

 

"In cities and states across the U.S., the new year brings a flurry of new laws addressing everything from soda consumption and sick leave, to semiautomatic weapons and catfish catching."

 

A range of new soda taxes is highlighted in the article:

 

"More than a year after Berkeley, Calif., introduced the nation's first tax on sweetened drinks, other cities are jumping on the bandwagon. Philadelphia's 1.5-cent-per-ounce tax on sugary and artificially sweetened drinks has taken effect. Bay Area voters in San Francisco and Oakland also approved a penny-per-ounce tax on sugary beverages, the same rate as Berkeley's. And Boulder, Colo., residents, approved the nation's steepest soda levy, at two pennies an ounce—or a $1.35 extra—for a two-liter bottle."

 

In contrast to these laws, which are all designed to curb anti-social behavior, the article in the second url below introduces a new French law that is designed to promote socially-beneficial behavior:

 

"If the world does not envy the French enough already for their generous vacations, universal health care and fine food and wine, the arrival of 2017 brings this: a newly created 'right to disconnect.' Though ridiculed in some quarters as a ban on work-related email after hours, it is not quite that. But it is born of the enlightened view that it is actually beneficial for people not to work all the time, and that workers have the right to occasionally draw the line when their employer's demands intrude on evenings at home, treasured vacations or Sundays with friends and family."

 

While the issue of banning after-hours email has caught all the media attention, there is evidence to suggest that not being constantly on-call benefits both employees and employers. As noted in an earlier Newsletter (Strategic CSR – Productivity), past experience suggests that employees that work less intensively are more productive:

 

"The new provision in the labor law does not ban work-related emails, but does require that companies with more than 50 employees negotiate a new protocol to ensure that work does not spill into days off or after-work hours."

 

There are a number of other French laws mentioned in the article that will be of interest to the CSR community.

 

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/

 

Taxes, Guns, Beer Included in New Laws

By Jacob Gershman

January 5, 2017

The Wall Street Journal

Late Edition – Final

A3

http://www.wsj.com/articles/a-look-at-new-state-and-local-laws-in-2017-1483531202

 

 

'Right to Disconnect' From Work Email and Other Laws Go Into Effect in France

By Alissa J. Rubin

January 3, 2017

The New York Times

Late Edition – Final

A6

https://www.nytimes.com/2017/01/02/world/europe/france-work-email.html

 

 

Strategic CSR - Mandatory vs. Voluntary

The article in the url below raises an important issue in the CSR debate, although it does not do it directly and does it in a context not related to CSR. Applied to a discussion about CSR, however, the article is instructive—Can and/or should firms be compelled to behavior more responsibly? Specifically, the article focuses on the absence of law compelling people to help others in distress. Even when the risk and cost to the person in a position to help is low, the social consequences of not helping are high:

“‘The expert swimmer, with a boat and a rope at hand, who sees another drowning before his eyes, is not required to do anything at all about it, but may sit on the dock, smoke his cigarette, and watch the man drown.’”

What is worse is that:

“If you voluntarily try to rescue someone, you may be liable if you then stop and the victim is harmed.”

The article explains the evolution of this situation in language commonly used to describe the laissez faire approach to capitalism often promulgated in the U.S.:

“The ‘no duty’ rule can be traced to the spirit of rugged capitalist individualism, the Darwinist idea that the common good is advanced through the struggles of selfish individuals.”

As such, the current law is defended in terms of its defining goals:

“One defense of the no-duty rule is that common law exists to prevent people from harming one another, not to compel people to help one another.”

A big part of the core argument behind Strategic CSR is a debate about whether more socially responsible behavior is best encouraged via mandated or voluntary actions. The resolution we settled on is that firms are more likely to implement CSR genuinely and substantively if they are convinced it is in their self-interest to do to (hence the focus on medium- to long-term stakeholder value). Central to this argument is the belief that firms are more likely to avoid or try and circumvent legislation if they are compelled to act. This debate is not fully resolved in my mind, however, as there are many grey areas in between the extremes (e.g., the rise of behavioral economics, see: Strategic CSR – Nudge) and the article below taps into these internal debates:

“A duty to help would not require bystanders to endanger themselves or provide help beyond their abilities; it could simply require warning someone of imminent danger or calling 911. … it would require us to accept our fundamental moral duty to help those in grave peril.”

The concept of moral duty is difficult to quantify because morals and values are subjective. As such, who gets to decide which morals/values apply and in what situations? More importantly, if I disagree with those morals/values, why should I be forced to comply with them? In spite of these very valid questions, however, asking them does not feel very satisfactory. I am currently drafting the third edition to the book and have made a more conscious effort to move beyond a self-interest argument alone, reemphasizing the importance of a CSR Filter as integral to the strategic process (a central argument in the second edition), but strengthening the need to embed that whole process within a framework of guiding values that set the parameters of decisions and guide all employees through the construction of the firm’s strategy, as well as the day-to-day implementation via operations. The work of John Mackey (Whole Foods Market) on conscious capitalism (http://consciouscapitalism.org/) is highly complementary to the argument we present in Strategic CSR and was instructive.

Take care

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/

Can the Law Make Us Be Decent?

By Jay Sterling Silver

November 7, 2012

The New York Times

Late Edition – Final

A25

http://www.nytimes.com/2012/11/07/opinion/can-the-law-make-bad-samaritans-be-decent.html

Strategic CSR - Walgreens

The article in the url below reports a new line of ‘green’ products recently launched by Walgreens, named Ology:

“The brand features bath and facial tissue, paper towels, copy paper, fluorescent light bulbs, laundry detergent, baby care products, householder cleaners and personal care items, such as adult shampoo and conditioner. All products are value-priced, Walgreens says.”

This raises the issue of where the tradeoff is between CSR products and “value-pricing,” but I’ll leave that to another day. What I found particularly interesting was another element of the story:

“The liquid products contain no harmful chemicals, according to the company.”

It is notable that the fact that the products contain “no harmful chemicals” is a point that needs to be highlighted. Why isn’t that the starting point for all consumer products? Anyway, it turns out that, rather than an act of proactive progressivism from Walgreens in response to a receptive market, this move is merely a reactive decision that was “prompted by increasing legislative pressure to regulate chemicals in consumer products.” Apparently:

“The US Senate previously approved The Safe Chemicals Act, which if passed, would overhaul the federal chemicals law and require ingredients be determined safe for human health before they could be used in everyday consumer products, Walgreens said. The pending legislation has compelled several industry leaders, including Walgreens, to pledge to remove potentially harmful and carcinogenic chemicals over the next several years.”

It is amazing to stop and think about that for a moment. Congress might just pass a law requiring that the ingredients in consumer products should not be hazardous to human health (see: http://www.saferchemicals.org/safe-chemicals-act/). The position in the U.S. that all chemicals are safe until proven otherwise, contrasts with Europe’s approach that all chemicals need to be proven safe before they are included in consumer products.

Someone wake me up when the twenty-first century gets here!

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/

Walgreens Launches Green Products Brand

November 9, 2012

Environmental Leader

http://www.environmentalleader.com/2012/11/09/walgreens-launches-green-products-brand/

Strategic CSR - Tobacco

I am still processing the news, contained in the article in the url below, that tobacco companies in Australia will no longer be able to see their products with their regular, brand-oriented packaging. Instead, they will have to display extremely graphic photos and statements in large bloc lettering stating how “Smoking Causes Lung Cancer”:

“One of the world’s toughest cigarette labeling laws is set to take effect in Australia in December … . Graphic images of mouth ulcers, cancerous lungs and gangrenous limbs will dominate the front of all cigarette packages sold in the country, and brand logos will be banned, after a landmark ruling by the High Court of Australia determined that the new laws were consistent with the Constitution and did not violate the rights of Big Tobacco.”

I find this decision fascinating on two levels: First, talk about societal indictment of a particular practice!

“Australian officials welcomed the ruling, which they hope will combine with some of the highest taxes in the world on tobacco to further drive down smoking rates.”

Second, for the businesses and executives who run them, it must be increasingly difficult to justify to themselves that they are adding social value. In the lawsuit, British American Tobacco, Imperial Tobacco, Japan Tobacco, and Philip Morris Australia had all argued that new law was an infringement on their intellectual property rights—i.e., their right to sell their products under their established brands. Part of me is amazed that a government would be willing to go so far (the photos are extremely graphic), although part of me is also a little shocked at the infringement of a business’ right to operate:

“The Australian decision on the suit filed by the multinational tobacco companies was the last major legal hurdle to implementing the new rules, which require health warnings to cover 75 percent of the front of cigarette packages and 90 percent of the back starting Dec. 1. Brand logos and colorful designs will be banned, with only a small space remaining where the brand name and variant of the cigarette can be printed. Packages will be required to be a uniform shade of olive green.”

It will be interesting to see how other governments respond:

“The European Union already bans cigarette advertising on billboards, television, radio, print media and the Web. The Union also prohibits tobacco companies from sponsoring cross-border events. National governments can go further, and some member states have banned tobacco companies from distributing promotional merchandise like ashtrays and umbrellas.”

There is evidence to suggest the strict tobacco laws already in place in Australia have already made a difference:

“Partly as a result, smoking rates in Australia have declined in recent years and stood at 16.4 percent among adult men and 13.9 percent among adult women as of 2010, according to figures from the Australian Cancer Council. In the United States, by comparison, most recent data from the Centers for Disease Control show the smoking rate is 21.5 percent among adult men and 17.3 percent for adult women.”

Contrast this response, however, with the response from U.S. courts in the article in the second url below:

“A U.S. appeals court ruled on Friday that cigarette companies do not need to comply with new federal rules requiring their products to show graphic warning images, such as of a man exhaling smoke through a hole in his throat. The 2-1 decision by a court in Washington, D.C., contradicts a ruling in a similar case by another court in March, setting up the possibility that the U.S. Supreme Court will weigh in on the dispute.”

Although the images are nowhere near as graphic as the ones being imposed on firms in Australia, the logic behind the Court’s decision was that the U.S. government’s demands infringed the corporations’ right to free speech:

“’This case raises novel questions about the scope of the government's authority to force the manufacturer of a product to go beyond making purely factual and accurate commercial disclosures and undermine its own economic interest -- in this case, by making 'every single pack of cigarettes in the country mini billboard' for the government's anti-smoking message,’ wrote Judge Janice Rogers Brown of the U.S. Court of Appeals for the District of Columbia Circuit.”

Take care

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/

Australian High Court Upholds Tobacco Rules

By Matt Siegel

August 16, 2012

The New York Times

Late Edition – Final

B7

http://www.nytimes.com/2012/08/16/business/global/australian-court-strikes-down-tobacco-challenge.html

Court: Cigarette companies don’t have to show graphic warning labels

Reuters

August 24, 2012

NBCNews.com

http://www.msnbc.msn.com/id/48779505/ns/health-addictions/

Strategic CSR - Soda tax

I wasn’t going to write about New York City’s ban on soda drinks larger than 16 ounces (I try to avoid subjects that have received a lot of media attention), but the article in the url below brings a different perspective to the debate that I thought might be of interest. The author focuses on the issue of whether the ban would result in the amount of plastic used in soda drink packaging increasing, rather than decreasing:

“If the super-size ban caused people to drink less soda, then perhaps the amount of waste from cups and bottles would decrease. But if people simply choose to buy more than one, then the packaging waste will increase.”

All the NYC ban did was to prohibit the sale of certain sized sodas in certain situations. Consumers can still buy the same amount of soda, they will just need to buy multiple smaller servings, rather than one big serving. If they do that, they will use multiple cups/bottles, rather than one cup/bottle—hence the possible increase in plastic use.

Another reason why I liked this article is that it re-focuses the debate where it should be—what is the most efficient way to produce the desired outcome (less soda consumption)?

“… a “soda tax”–a per ounce tax on beverages with added sugar. A tax like that would give people an incentive to drink less.”

A tax would allow people the option to consume as much soda as they want, but they would be penalized in proportion to that amount. For people less able to afford the tax, this would discourage consumption. Other social ‘nudge’ experiments have demonstrated that small price increases can generate significant changes in behavior (e.g., Case-study: Paper vs. Plastic, p313).

But, if Mayor Bloomberg would rather focus on banning unhealthy calories (rather than making them more expensive), the Huffington Post has some helpful suggestions for which foods he might consider banning next (or, perhaps, should have banned before worrying about soda):

“We certainly don't want to give them any more ideas, but these 11 foods -- most at 30-40 times the calorie count of the typical banned soda -- could very well now be on Bloomberg's radar.”

Take care

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/

Will a NYC Ban on Large Sugary Sodas Decrease Obesity or Increase Plastic Waste?

By Beth Terry

June 19, 2012

My Plastic-free Life

http://myplasticfreelife.com/2012/06/will-a-nyc-ban-on-large-sugary-sodas-decrease-obesity-or-increase-plastic-waste/