Strategic CSR - Naturalization

You will have no doubt noticed that the tone and level of civility in public discourse has declined notably in recent years. I think the drivers of this shift are complex and largely operate at the societal level. Any particular individual is a symptom of the problem, rather than being any kind of cause. Of course, we can all exacerbate (or salve) divisions and, at some level, have to live with those decisions that we make on a micro level, every day.

 

This afternoon, I was sworn in as a U.S. citizen. I had been looking forward to the ceremony for several weeks – of course on an individual level, but also as a social scientist.

 

As expected, it was emotional for many who were there. And, it was quite a group – extremely diverse on every metric you can think of. I remember that, when attending my final interview appointment, the waiting room was like a United Nations gathering. This sense of the world coming together was enhanced at today's ceremony. We were told that, among the 50 people being sworn in, 25 countries were represented. Two thoughts, in particular, came to mind:

 

First, the event was a very visible (and visceral) demonstration of the extent to which immigration is embedded in this country – central to everything it stands for and will achieve, going forward.

 

But second, I think the emotion of those being naturalized demonstrates the value of U.S. citizenship to those who come from countries around the world that are, relatively, in a much worse state. Of course, there was relief because a long and complicated process had come to an end, which provides security. But, I think there was also a sense of security (pride?) that comes from belonging to something larger than the individual and that has meaning – an idea or project that represents a greater purpose.

 

The more I think about this second point, in particular, the more I think that all Americans should witness one of these ceremonies at some point, so they do not lose sight of what this country means to the rest of the world. I would start with those who seem so opposed to immigration (for whatever reason), but I would extend it to everyone in this massive country. John Oliver was very good on this topic last Sunday:

 

https://youtu.be/tXqnRMU1fTs

 

If nothing else, a broader understanding of the immigration process in this country provides common ground that all Americans should be able to support. And, as such, it forms the basis for a little more agreement and a little less conflict.

 

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 

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Strategic CSR - Super Bowl

The Super Bowl is taking place this weekend here in the US. In addition to the game itself, this event is known for the advertising that takes place during commercial breaks. Given the large potential captive audience, firms are willing to pay heavily for the chance to present to them and tradition dictates that they go all out. Often in previous years, the ads have been more eventful and entertaining than the game.

 

More recently, however, companies have begun to stray from product announcements and juvenile humor to tackle more difficult topics that the country is wrestling with at the time. One famous/infamous attempt (depending on your perspective) was Coca-Cola's ad for the 2014 Super Bowl, in which a very visibly diverse group of people (all of whom were US citizens) sang "America the Beautiful" in different languages (it still gives me goose bumps). See the 90 second version of the ad here, and some of the backlash/controversy it generated here.

 

Anyway, 2014 seems like a different age when we could be shocked by such 'controversial' acts. According to the article in the url below, we are now much more jaded and just want companies to stay away from such 'political' statements:

 

"More brands are capturing headlines by tangling with political and social issues in their advertising campaigns. A new poll suggests, however, that most Americans would rather they don't try the same thing during the Super Bowl. And viewers are likely to get what they want. Two-thirds of consumers call the Super Bowl an inappropriate place for advertisers to make political statements."

 

The graph in the article reports that, when asked if the Super Bowl is the "right platform for advertisers to make political statements," 2,200 respondents replied:

• Very appropriate 7%
• Somewhat appropriate 13%
• Not too appropriate 17%
• Not at all appropriate 49%
• Don't know 14%

As might be expected, there are differences among generations, but even the youngest respondents were not keen on Super Bowl ads:

 

"Baby boomers in the poll disapproved of political Super Bowl advertisements more, at 77%, than younger cohorts such as millennials (55%) and Generation Z, defined as those 18-21 years old (43%). … Only 35% of Gen Z respondents to the poll called political Super Bowl ads "very" or "somewhat" appropriate."

 

This is a little strange, given that the mix of sport and politics was seeming to gain traction with Nike's support for Colin Kaepernick (see Strategic CSR – Patriotism and Strategic CSR - ESPN). The trouble is, I don't see how firms can avoid being 'political.' If they were to say we value our customers or our employees, I am guessing people would be OK with that, but it is no less of a political statement. I am sure there are issues that people would rather not be troubled with as they work their way through an unhealthy amount of chicken wings, but that is different from wanting firms to remove values from their advertising. Everything any firm does is grounded in ethics and values and morals—it is just that some firms judge the mood of the country better than other firms and get their ads 'right,' while others misjudge the mood and get their ads 'wrong.' What I like so much about the Coca-Cola ad is that the company knew it was putting something controversial out and it did it anyway. It felt the values were more important and they wanted to stand by them. It is why I love the ad so much. I wish more companies were as brave.

 

Enjoy the football for those of you in the US.

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

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Consumers Say Brands Shouldn't Bring Politics to the Super Bowl

By Nat Ives

January 16, 2019

The Wall Street Journal

Late Edition – Final

https://www.wsj.com/articles/consumers-say-brands-shouldnt-bring-their-political-stands-to-the-super-bowl-11547636401

 

Strategic CSR - Patriotism

The article in the url below tackles the issue of active stakeholder engagement. In particular, it discusses the politicization of sports here in the U.S. in the aftermath of the September 11 attacks:

 

"I think back to that Tuesday morning nearly 17 years ago. I was living with my fiancée on 49th Street and 10th Avenue in New York, Hell's Kitchen, covering the Yankees for The Bergen Record, when the World Trade Center fell. It changed many things. For any American born after, say, 1985, it became the most defining day of their life — their Pearl Harbor, their Cold War, their Vietnam and Watergate. But it also changed how sports were sold, packaged, perceived and marketed."

 

The author, who has just published a book on this subject (The Heritage: Black Athletes, a Divided America, and the Politics of Patriotism), argues that, what was originally intended to be a unifying force for a wounded country has been corrupted into paid advertisements designed to encourage military recruitment. More importantly, it has had a damaging effect on public discourse, where any attempt to divert from the accepted norm becomes an act of disloyalty:

"It all felt right, until temporary grieving turned into a permanent, commercial bonanza — and a chilling referendum on who gets to be American. But then it didn't feel right, like when in 2008, a New York police officer ejected a fan at a Red Sox-Yankees game after he left his seat during a seventh-inning-stretch recording of 'God Bless America.' Recently a high-ranking Red Sox official told me — nearly 17 years after the towers fell — that he really doesn't know why the team still plays 'God Bless America,' but he knows this: The team would 'get killed' publicly if it was the first team to stop doing it."

A good example of the 'corruption' of the patriotic displays at sports events is the extent to which they are manufactured, rather than being organic and spontaneous:

 

"There was another major pivot when the Department of Defense surreptitiously began paying sports teams to embed the military in the game — paying to have servicemen strategically seated at games, surprise homecomings as in-game entertainment, American flags the size of the football field — as recruiting tools. The public wasn't told that the displays weren't organic support of the troops but a business transaction between military and team. The commercials followed."

 

The author argues, persuasively I think, that this has had ramifications for those athletes who seek to use their platforms to promote social change; in particular, it has served to further smother the voice of African-American athletes. The conclusion is that this has been allowed to happen by everyone else. At some level we know, but we either no longer care or are too nervous to speak up:

 

"On it goes, the perfectly scripted games, with Law Enforcement Appreciation Night in Dallas and anti-police protests outside a Kings game in Sacramento. Sports have been remade since Sept. 11, and nobody seems to care. People even acknowledge paid patriotism to be a deception, but have decided incongruously that it's a 'harmless deception.' Ultimately, I reached another conclusion: I no longer ask 'How did we get here?' but 'How do we get out of here?' and do we even care enough to try?"

The tie-in to Strategic CSR is the idea of stakeholder engagement – that, much of what our society has become (the freedoms and rights that we have) has been won at great cost. In other words, what we take for granted is not the natural state of being, but something that has to be constantly fought for and renewed. To the extent that we give up that fight, then society can quickly revert to what was before. If we are doing that consciously (if it is change we are choosing), it is OK. If we are doing it negligently, however, then we are sacrificing much of what many others before us struggled to achieve, and we will be worse off as a result.

 

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/

 

 

How Did Our Sports Get So Divisive?

By Howard Bryant

May 12, 2018

The New York Times

Late Edition – Final

A21

https://www.nytimes.com/2018/05/12/opinion/sports-colin-kaepernick-9-11.html

 

Strategic CSR - Patriotism

I have noted before that I am constantly surprised that patriotism on the part of companies (paying their ‘fair’ share of taxes) is not more highly valued. This is particularly true in the U.S., but also elsewhere. The recent trend in inversions, particularly in the pharmaceutical industry, is evidence of the willingness of U.S. citizens (and politicians) to allow firms to avoid (bordering on evade) U.S. taxes:

 

“… the use of inversions [by U.S. corporations] is now entering its third year. Pfizer is trying the biggest one yet, a $152 billion deal for Allergan, the maker of Botox, which is based in Dublin.”

 

According to the article in the url below, however, the real value of inversion for firms lies in the associated policy of “earnings stripping”:

 

“A company completes an inversion deal and moves its headquarters for tax purposes outside the United States. The now-foreign company still has operations in the United States. These American operations are still taxed in the United States and pay taxes here. The point of the inversion, of course, was to reduce taxes as much as possible. So, the company arranges for the United States parts of its operations to borrow large amounts of money from the now-foreign parent. The indebted American subsidiary will pay interest on that debt to the parent. Under the United States tax code, the interest payment can be used to offset the American earnings. Voilà! The earnings of the company are now offset by these interest payments. What used to be a significant tax bill disappears.”

 

In other words, while inversion allows firms to pay tax on its foreign earnings at the rate of its new foreign home, it still requires firms to pay U.S. taxes on revenues earned in the U.S. Alternatively, earnings stripping allows the firm potentially to avoid paying any U.S. taxes at all, which only increases my surprise that this lack of patriotism (a willingness to support the country that enabled the firm’s success and in which it is largely based) is not more of an issue:

 

“If you are an American taxpayer, it means the burden of making up lost revenue falls more heavily on you. It also creates an uneven playing field for other companies that end up feeling like fools for staying put. All in all, it highlights the problems of the United States tax code, which shows again and again how it just does not work in an increasingly global world.”

 

While the U.S. tax code certainly needs reforming, the real reason these avoidance practices continue is that stakeholders do not care enough to do anything about them.

 

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/


If You Think Corporate Inversions Are Bad, Brace Yourself

By Steven Davidoff Solomon

February 10, 2016

The New York Times

Late Edition – Final

B5

http://www.nytimes.com/2016/02/10/business/dealbook/corporate-inversions-arent-the-half-of-it.html

 

Strategic CSR - Taxes

I have long wondered why corporations avoiding state and federal taxes by incorporating overseas is not a bigger problem than it is. The recent decision by Starbucks to re-locate their European HQ to the UK (in order to pay a ‘fairer’ amount of tax) indicates stakeholders elsewhere are bringing pressure to bear on firms that seek to avoid contributing to the economies in which they operate. In the U.S., however, this issue has lagged. In the face of inaction by the federal government, individual states are gradually beginning to recoup their share of the lost revenue, which is significant:

 

“Offshore tax shelters cost the federal government $30 billion to $90 billion annually, according to a 2013 Congressional Research Service report. The U.S. Public Interest Research Group, which tracks corporate taxes, puts the amount that states lose at $20 billion a year.”

 

The states are doing so by passing legislation that counts revenues booked in overseas countries as taxable income that must be declared on the firms’ state income tax returns:

 

“Oregon enacted a bill last June for the 2014 tax year identifying 39 countries and territories—including Barbados, Liberia, and the U.S. Virgin Islands—as corporate shelters. The state counts profits that corporations and their subsidiaries stash in shelter countries as taxable income, and companies that do business in the state must report it on their state tax returns and pay up.”

 

Some firms will face significantly higher tax bills as a result:

 

“Microsoft, Apple, and IBM accounted for $37.5 billion, or 18.2 percent, of the total increase during the past year. Caterpillar avoided $2.4 billion in U.S. taxes over more than a decade by shifting profits from a parts business to a subsidiary in Switzerland, according to a report issued on March 31 by a Senate committee.”

 

There is scope for many other states to follow suit:

 

“Few of the states that have passed or are contemplating tax-haven legislation are home to a large multinational such as Microsoft, which is based in Washington, or Apple in California, IBM in New York, or Caterpillar in Illinois. Those states would stand to collect far more from such measures. California lost the most to offshore havens in 2011, an estimated $3.3 billion, the Public Interest Research Group reports.”

 

The graphic that accompanies the article provides additional detail:

 

http://images.bwbx.io/cms/2014-04-21/pol_taxes17__01__630b_inline.jpg

 

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/


U.S. States Target Corporate Cash Stashed Overseas

By Mark Niquette

April 17, 2014

Bloomberg Businessweek

http://www.businessweek.com/printer/articles/195661-u-dot-s-dot-states-target-corporate-cash-stashed-overseas

 

Strategic CSR - Corporate Tax

The article in the url below captures concisely the issue with corporate tax in the U.S. The system is unwieldy and the rate is high; as a result, corporations seek to avoid it. The results can be quite stark:

 

“Taxes paid by profitable companies in the United States are often less than half the statutory 35% tax rate, according to a new study released on Monday by the U.S. Government Accountability Office.”

 

As indicated by the article’s title, five numbers, in particular, emphasize the disconnect between profits made and taxes paid:

 

“17.4% – Including state and local taxes, this was the average effective tax rate for profitable companies with at least $10 million in revenues in 2010.”

 

“$242 billion – This is the amount of corporate income taxes the GAO says was paid in 2012 … . That figure compares to $845 billion collected in social insurance taxes and $1.1 trillion collected in individual income taxes.”

 

“$1.1 trillion – In 2010, profitable companies reported an aggregate $1.4 trillion in pre-tax profits, while unprofitable companies reported losses of $315 billion, resulting in a net pre-tax income of $1.1 trillion for all corporations.”

 

“16.9% – The effective tax rate for profitable companies has … declined to 16.9% in 2010 from 20.8% in 2008.”

 

I particularly like the last number:

 

“$762 billion – Companies sometimes report different figures to the Internal Revenue Service than they do to investors. When accounting for transactions between corporate units on their tax returns, companies made adjustments in their favor to the tune of $762 billion compared to their 2010 financial statements, and negative adjustments of just $20 billion.”

 

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/

 

 

Five Numbers Show How Much Corporations Really Pay in Taxes

By Emily Chasan

July 1, 2013

The Wall Street Journal

http://blogs.wsj.com/cfo/2013/07/01/five-numbers-show-how-much-corporations-really-pay-in-taxes/

 

Strategic CSR - Patriotism

I find it fascinating that tax avoidance by companies is not a bigger issue among stakeholders. Particularly in countries where patriotism is an important part of society (such as the U.S. and increasingly in the UK), I would expect to see a direct link between the sense of a firm as a ‘national brand’ and its willingness to pay a reasonable level of tax. If nothing else, paying tax is a base recognition that that firm receives many benefits from the government/population (e.g., educated workers, good logistical and legal infrastructure, etc.) and that these benefits need to be funded by all sections of the community (including foreign-based firms that have a significant operating presence in the country).

 

Gradually, this issue is beginning to surface more regularly in the U.S., although mostly at an individual level (e.g., Mitt Romney was criticized for holding funds offshore in last year’s presidential election). In the UK, there is more of a focus on corporate tax avoidance by foreign firms through campaigns such as Uncut (http://www.ukuncut.org.uk/):

 

“The UK has similar problems with foreign companies operating in the country. For example, Starbucks, the Seattle-based international coffee chain, has been accused of tax avoidance in the UK. Between 1998 and 2011 the company has made £3 billion ($4.8 billion) in sales but paid out just £8.6 million ($13.75 million) in taxes on its 735 stores in the country. In the last three years Starbuck did not pay a penny in taxes in the UK. All told Her Majesty’s Revenue & Customs (HMRC) estimates a total of £32 billion ($51.2 billion) was lost to tax avoidance in the UK in 2011 alone, out of a gross domestic product of $2.5 trillion.”

 

The article in the url below highlights a good example of the problems associated with tax avoidance by firms operating abroad:

 

“Associated British Foods (ABF), a UK company that makes Silver Spoon sugar, pays almost no taxes on its profitable Zambian sugar subsidiary, according to a new ActionAid report. The authors allege ABF has avoided estimated taxes of $27 million since 2007, enough to put 48,000 Zambian children in school. … The company generates a healthy revenue of some $200 million a year and $18 million in profits.”

 

The company is quite innovative in its avoidance:

 

“One way ABF avoids taxes is by contracting out some of Zambia Sugar ‘purchasing and management’ functions to a company in Dublin, Ireland, which happens to benefit from a bilateral treaty that allows cash flows between the two countries to be tax free. ABF also contracts out ‘trade contacts with customers in the European sugar market, transportation of sugar to Europe, foreign currency management and the availability of cost effective credit terms’ to a company in Mauritius which in turn is a subsidiary of a South African company where tax rates are lower than in Zambia. Oddly enough the Irish company has no employees on paper while the company in Mauritius has only one employee. Meanwhile Zambia Sugar profits are paid out to a Dutch company which in turn allows it to pay significantly lower taxes under yet another bilateral treaty, according to ActionAid. In one particularly egregious case, Zambia Sugar borrowed money from a Zambian bank to finance an expansion, but by diverting the loan through an Irish subsidiary, was able to avoid paying taxes on the interest.”

 

What is clear, however, is that this example is not particularly extreme or unusual:

 

“‘We do not allege that any of the companies in this report have done anything illegal,’ write the authors of the ActionAid report. ‘Indeed, sadly their tax practices are not even particularly unusual. A growing litany of examples from Europe and North America suggest that the arrangements we describe here are simply ‘plain vanilla’ business practice for many multinationals.’”

 

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/

 

 

Sweet Nothing: UK Food Giant Avoids Taxes on Zambia SugarPratap Chatterjee
CorpWatch
February 15th, 2013

http://www.corpwatch.org/article.php?id=15818

 

Strategic CSR - Corporate taxes

An issue that was included in the first edition of Strategic CSR (Issues: Patriotism, p258), but dropped from the second edition, focused on corporate tax avoidance. Firms can legally avoid paying taxes by, for example, incorporating offshore (a P.O. Box in a non-descript building), rather than where either their HQ or major area of operations are located. The issue discussed whether this would be a liability for firms as consumers reacted to firms’ unwillingness to contribute a ‘fair’ proportion of profits to the tax base.

The issue is real, as indicated by this recent article in the NYT (http://www.nytimes.com/2011/02/02/business/economy/02leonhardt.html) that highlights the gap between the official U.S. corporate tax of 35% and the amounts firms actually pay:

“Over the last five years, on the other hand, Boeing paid a total tax rate of just 4.5 percent, according to Capital IQ. Southwest Airlines paid 6.3 percent. And the list goes on: Yahoo paid 7 percent; Prudential Financial, 7.6 percent; General Electric, 14.3 percent.”

One of the reasons why this issue was dropped from the second edition is that the extent to which consumers care sufficiently about this issue to change their behavior is unclear. This may now be changing.

The issue was revived in the UK at the end of last year by the UK charity, Christian Aid (see also: http://www.ukuncut.org.uk/). The NGO launched a campaign targeting firms that were legally (but unfairly, the charity argued) avoiding paying sufficient corporate taxes in the UK. The articles in the three urls below discuss the campaign, as well as the implications for firms:

“One lesson for companies is clear: tax is becoming an important source of reputational risk. … over the past decade campaigners have begun to focus on it with the same zeal as they apply to more immediately emotional issues such as the environment or child labour.”

The frustration of people who see corporations earning large amounts of money, but not paying any taxes, is understandable:

“It is not just that they believe companies are evading their responsibilities at a time when taxpayers face the slashing of their services. It is that it all seems so contrived. Ordinary people cannot work in Pittsburgh and pay (or not pay) tax in Bermuda, or live in Birmingham and enjoy Geneva's tax rates. Why should companies be able to do so?”

In response, the articles pose thoughtful and subtle questions about exactly how much firms should be expected to pay. The answer is not as easy as it might initially appear:

“In most developed societies, companies have the right – as do individuals – to arrange their affairs in such a manner as to minimise the amount of tax they pay. It is legal, even honourable. After all, a company that goes bankrupt because it paid more in tax than it needed to would be neither responsible nor competent. The maxim only holds true, however, so long as the degree to which you can minimise that liability passes some kind of intuition test about fairness. A big, prosperous corporation that makes large profits in a country and pays absolutely no tax there – well, that’s clearly not on. But then you have to ask the question – what is the socially responsible right amount of tax to pay?”

Ultimately, while it is pertinent to ask “What is a fair level of tax for companies to pay?” it is also worth remembering that the emotions surrounding the tax debate (especially when firms are abiding by the law) should not overshadow the total social value firms generate:

“Which do we think is going to solve poverty, companies giving governments more cash, or companies being able to thrive and create jobs? If there is an optimal balance, where is it? Is it the same in all parts of the world?”

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/

Corporate disclosure: The tax blame game

It’s too easy to demonise big companies that take steps to minimise their tax liabilities

By Mallen Baker

December 3, 2010

Ethical Corporation Magazine

http://www.ethicalcorp.com/content.asp?ContentID=7203

Tax claims hit at reputation as well as the coffers

By Vanessa Houlder

1338 words

9 November 2010

Financial Times

USA Ed1

12

http://www.ft.com/cms/s/0/c153e27c-eb7d-11df-b482-00144feab49a.html

Companies face the people's fury over taxes

By Michael Skapinker

816 words

14 December 2010

Financial Times

Asia Ed1

11

http://www.ft.com/cms/s/0/64cf78cc-06f3-11e0-8c29-00144feabdc0,s01=1.html

Strategic CSR - Auditing CSR

The article in the url link below outlines a new idea to standardize and certify a firm’s degree of environmental and social responsibility (Issues: Auditing CSR, p94):

“… a company that seeks certification to become a B Corporation (the B stands for “beneficial”) is required to amend its articles of incorporation to say that managers must consider the interests of not just shareholders, but also employees, the community, and the environment. Companies are also ranked on their answers to a survey of more than 100 questions, covering topics that include the company’s policies on the environment, philanthropy, diversity, and transparency.”

In introducing yet another CSR evaluation standard, however, I am suspicious of the definition this organization uses in determining what constitutes social value:

“A new nonprofit organization called B Lab is hoping to address this challenge by creating a set of strict standards to protect companies and consumers that seek to work for the greater good.”

Surely, all firms that remain in business are adding some value somewhere. The net effect might be negative, but it is important to recognize sales, profits, number of jobs created, amount of taxes paid, etc., etc., as part of a firm’s social responsibility profile. Some CSR advocates will just write this off as a “bare minimum”—i.e., all firms must pay taxes. But, in fact, many firms avoid taxes by registering offshore, and some pay much more in taxes than others (Issues: Patriotism, p258). I think attempts to evaluate social value need to incorporate basic operational issues such as these, as much as they incorporate sexier issues such as the amount of carbon off-setting a firm does (which, after all, usually only involves the firm writing a check).

Take care
Dave

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

New Certification Scheme Aims to Protect Socially Responsible Companies
By Alana Herro
The Worldwatch Institute
January 3, 2008
http://www.enn.com/business/article/28575
Alana Herro of the Worldwatch Institute reports on a new nonprofit organization called B Lab that will approach the challenge of maintaining the integrity of socially conscious businesses that become so successful that they are bought out by larger conglomerates.