Strategic CSR - Earth Overshoot Day

The idea of ‘Earth Overshoot Day’ seems as good as any in order to convey the strains that our current economic model place on the resources at our disposal:

 

“August 20 is Earth Overshoot Day 2013, marking the date when humanity exhausted nature’s budget for the year. We are now operating in overdraft. For the rest of the year, we will maintain our ecological deficit by drawing down local resource stocks and accumulating carbon dioxide in the atmosphere.”

 

In addition to marking this event, the website by the Global Footprint Network finds other innovative ways to convey both our absolute resource use, as well as the extent to which we consume resources relative to each other. For example, “How many Chinas does it take to support China?”

 

http://www.footprintnetwork.org/images/article_uploads/EOD2013_debtorinfographic_thumb.jpg

 

The website also takes the time to highlight potential areas of positive behavior although, even here, we are far from sustainable:

 

“Not all countries demand more resources and services than their ecosystems can provide. Australia, for example, uses half the capacity of Australia but its ecological reserve has been eroding over time.”

 

http://www.footprintnetwork.org/images/article_uploads/EOD2013_creditorinfographic_thumb.jpg

 

To discover whether your country is an “ecological creditor or debtor,” see this website: http://storymaps.esri.com//globalfootprint/. My guess is that the answer is rarely going to be good.

 

Have a good weekend.

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/

 

Strategic CSR - Alta Gracia

The article in the url below reports on an inspiring new apparel brand, Alta Gracia, which is not only making clothes in an ethical way, but is also persuading college bookstores to display their clothes more prominently than those from other apparel companies:

 

“The first-to-the-eye displays at the front of the Georgetown University bookstore don’t belong to Nike or Adidas or other recognized giants of the global garment trade, but to Alta Gracia, the label of a South Carolina company trying to carve a niche by paying above-average wages at its Dominican Republic factory and building confidence about the working conditions.”

 

The company is part of a larger apparel company, Knights Apparel, which is “No. 2 in the [college apparel] field behind Nike, according to the Collegiate Licensing Co.”:

 

“Most of the company’s production is spread around the world like its competitors’, including in Bangladesh. But [Knights Apparel CEO] Bozich said it was the emotional appeal of students that led him to think there was a viable business in clothes ‘branded’ with their concerns in mind. Alta Gracia pays more than triple the minimum wage, is run with strong employee input and relies on outside monitors to certify factory conditions.”

 

It is a difficult industry/product to monitor and introduce meaningful change:

 

“A single garment might combine parts, labor, fabric and other elements from several countries, complicating efforts to create any sort of ‘fair trade’ labeling standard. Old-fashioned consumer boycott tactics are shunned because workers might get fired as a result.”

 

It will be interesting to see how the company fares. In particular, I was struck by two comments towards the end of the article. On the one hand, there is the student who worked for United Students Against Sweatshops for four years:

 

“‘[Large multinational apparel companies] target young people with their advertising, but they have not respected us enough to realize we won’t mindlessly consume their product,’ she said.”

 

On the other hand, however, as noted by Knights Apparel CEO:

 

“Three years into the experiment, Bozich said the factory loses money, with lower profit margins on each item because of the higher wage and other costs, and the low overall demand.”

 

My fears are twofold: first, that, unfortunately, most students (as with most people) do “mindlessly consume” and that, second (as a direct result of the first point), while the intentions among students is good, those intentions do not necessarily translate into a willingness to pay the associated price. Alta Gracia represents an effective test of these fears/assumptions.

 

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/

 

 

University logos become weapons in debate over textile factor working conditions

By Howard Schneider

May 27, 2013

The Washington Post

http://www.washingtonpost.com/business/economy/university-logos-become-weapons-in-debate-over-textile-factory-working-conditions/2013/05/27/503bbe06-c3da-11e2-8c3b-0b5e9247e8ca_story.html

 

Strategic CSR - Risk vs. Uncertainty

Al Gore writing in The New York Times is not interesting. Al Gore writing in The Wall Street Journal, as he did again a couple of weeks ago, however, is worth a read. In particular, the article in the url below by Gore and David Blood (Gore’s business partner with whom he has written previously, see: Strategic CSR – Corporate Stakeholder Responsibility) is interesting for three reasons. First, the distinction they draw between risk and uncertainty. In short, risk can be measured, uncertainty cannot:

 

“As the economist Frank Knight established, there is a subtle but crucial distinction between the two: Uncertainty is what good investors usually fear the most, because it cannot be measured or priced as risk can be. But when investors mislabel risk as uncertainty, they become vulnerable to the assumption that since it cannot be measured, they might as well ignore it.”

 

Second, the three risks (beyond “a meaningful carbon price”) that they argue threaten investors with significant carbon exposure in their portfolios (i.e., carbon-based resources and assets that will be stranded, or unused) as global efforts pick-up to prevent calamitous increases in global temperatures (“at least two-thirds of fossil fuel reserves will not be monetized if we are to stay below 2°C of warming”):

 

“First is regulation that could strand assets in several ways: direct regulation on carbon led by authorities at the local, national, regional, or global level; indirect regulation through increased pollution controls, constraints on water usage, or policies targeting health concerns; and mandates on renewable energy adoption and efficiency standards. … Second, stranding may occur as a result of market forces. Renewable technologies are already economically competitive with fossil fuels in a number of countries without subsidies. … Third, sociopolitical pressures (e.g., fossil-fuel divestment campaigns, environmental advocacy, grass-roots protests and changing public opinion) could create an environment in which carbon-intensive businesses could lose their ‘license to operate,’ thereby stranding assets.”

 

And, third, the four actions they suggest investors can take to assess the risks associated with carbon assets in their portfolios:

 

“First, identify carbon asset risks across portfolios. … Second, engage corporate boards and executives on plans to mitigate and disclose carbon risks. … Third, diversify investments into opportunities positioned to succeed in a low-carbon economy. … Fourth, divest fossil fuel assets.”

 

The case they make that carbon-based assets represent a risk that can be measured (rather than an uncertainty that can be ignored) by investors is compelling; provided, however, you agree with their implicit assumption that investors are rational and are willing to internalize the overwhelming scientific consensus about what will occur in the absence of intervention:

 

“Here is the relevance of carbon to investing: There is consensus within the scientific community that increasing the global temperature by more than 2°C will likely cause devastating and irreversible damage to the planet. Reliable measurements make it clear that we will easily cross this threshold in the near term at our current rate of CO2 emissions. So in an effort to avoid it, the International Energy Agency has calculated a global ‘Carbon Budget’ that accommodates the burning of merely one-third of existing fossil fuel reserves by 2050.”

 

The JFK quote they use to conclude their article mirrors the “Rational Argument for CSR” (Chapter 1, p26):

 

“In the words of President John F. Kennedy, ‘There are risks and costs to a program of action. But they are far less than the long-range risks and costs of comfortable inaction.’ The transition to a low carbon future will revolutionize the global economy and present significant opportunities for superior investment returns. However, investors must also acknowledge that carbon risk is real and growing. Inaction is no longer prudent.”

 

Engagement is almost always preferable to withdrawal or, worse, ignorance. Withdrawal or, more likely, ignorance, however, are very real possibilities.

 

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/

 

 

The Coming Carbon Asset Bubble

By Al Gore and David Blood

October 30, 2013

The Wall Street Journal

Late Edition – Final

A15

http://online.wsj.com/news/articles/SB10001424052702304655104579163663464339836

 

Strategic CSR - Shareholder Activism

This graphic from the article in the url below contains some fascinating data regarding shareholder resolutions filed at the annual general meetings of the Fortune 250 in 2013:

 

http://si.wsj.net/public/resources/images/CF-AA077_MINOWc_D_20130620174818.jpg

 

The graphic details the following information:

• Annual number of shareholder proposals by company
• Average proposals received by company, broken down by industry
• The source of the proposals
• The content of the proposals
• The percentage that receive majority support
• The percentage support, broken down by content type

The numbers that stand out most for me are the percentage breakdown of proposal types (39% corporate governance; 37% social policy; and 24% executive compensation) and the source of the proposals (33% labor-affiliated organizations; 26% “corporate gadflies”; 25% religious-affiliated and SRI organizations; 16% other investors).

 

Have a good weekend.

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/

 

 

The Empowered Shareholder

The Wall Street Journal Report: CFO Network

June 24, 2013

The Wall Street Journal

Late Edition – Final

R6

http://online.wsj.com/news/articles/SB10001424127887323566804578554151159862198

 

Strategic CSR - Google

The article in the url below focuses on Google’s recent backtracking on its “20% time” policy. The policy, which allows employees to spend one day of the week (20% of their time) pursuing projects of their own choosing, is heralded as a key source of innovation. Similar to companies such as 3M and W.L. Gore, Google has identified the policy as one of the perks of working for the firm, while also being of great organizational value:

 

“Google had widely touted its 20% time as a cornerstone of its ‘innovation machine.’ Larry Page and Sergey Brin also cited 20% time as leading to many of Google's ‘most significant advances.’ These include Gmail, Google News and Adsense—and that last one accounts for a quarter of Google's $50 billion-plus in annual revenue.”

 

And, as the author in the article notes, innovation is not something that should be taken for granted:

 

“Continuous innovation is one of the hardest tricks in business. … One can't just throw money and bodies at innovation—there is no correlation between the size of a company's R&D budget and its innovation rate. Most ideas are bad ones, so you have to entertain a lot of them to find the real gems. According to academic research, a company, on average, needs 3,000 ideas to get 300 of them formalized, 125 of them into small experimentation, 10 of them officially budgeted, 1.7 launched—and one that makes money.”

 

Whether or not this decision is about cost-savings (as indicated in the article), the message it sends is not a good one:

 

“Seen in this light, freeing up time for innovation is not just another on-the-job perk. It is a token of respect that offers room for personal growth and a degree of autonomy to employees, regardless of what their ‘day job’ is.”

 

The point is that, the 20% time policy was not a ‘perk,’ to be extended or withdrawn depending on current revenues, but it was the heart and soul of what makes Google an innovative organization. As such, cancelling it sends the signal:

 

“… that management, not the workers, knows what the most productive use of employees' time is. It's a step down the road to a company of clock-punchers.”

 

What I found interesting about the article, however, was some of the perks that Google does offer to its employees (perks that were deemed more important to be retained ahead of the 20% time policy). While everyone knows about the famous all-you-can-eat cafeteria, apparently, Google now offers “a death perk” that is much more generous than you average life insurance policy:

 

“As Chief People Officer Laszlo Bock explained to Forbes last year, an employee's surviving spouse gets a 10-year pay package, with all stock vested immediately, while any children receive $1,000 monthly until 19 (or 23 if a student).”

 

It got me thinking as to how much of a draw a policy like this is, especially to young workers (I am guessing the average employee age at Google is below most firms) who might not be able to imagine life beyond the age of 30! I wonder how much loyalty a policy like this generates and, therefore, whether it is a good use of company money, particularly in comparison to a policy that has such a track-record of proven success:

 

“The freest, most innovative companies we know were coherently built to produce a corporate culture that nurtures those universal needs of intrinsic equality, growth and self-direction. In such a culture, people are self-motivated and decide for themselves what initiatives are best for advancing the corporate vision. … When 20% time or its equivalent isn't a perk but part of the freedom-of-initiative culture, higher-ups are acknowledging that they don't know what the next Gmail or Adsense is, and so they're counting on employees to find it. A company that [cancels such a policy] is a company that believes it has already found all the targets worth aiming at. Such a company risks leaving its best growth in the past, and exporting its best ideas to competitors.”

 

I am guessing, just like with students (and most faculty J), it is the free food that brings them in!

 

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/

 

 

How an Endangered Google Policy Got Results

By Brian M. Carney and Isaac Getz

August 29, 2013

The Wall Street Journal

Late Edition – Final

A15

http://online.wsj.com/article/SB10001424127887324591204579039271235103070.html

 

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 - Financial crisis

The article in the url below presents a pretty compelling argument in favor of CSR:

 

“The six biggest U.S. banks, led by JPMorgan Chase & Co. (JPM) and Bank of America Corp., have piled up $103 billion in legal costs since the financial crisis, more than all dividends paid to shareholders in the past five years. That’s the amount allotted to lawyers and litigation, as well as for settling claims about shoddy mortgages and foreclosures, according to data compiled by Bloomberg. The sum, equivalent to spending $51 million a day, is enough to erase everything the banks earned for 2012.”

 

Amazingly:

 

“JPMorgan and Bank of America bore about 75 percent of the total costs, according to the figures compiled from company reports. JPMorgan devoted $21.3 billion to legal fees and litigation since the start of 2008, more than any other lender, and added $8.1 billion to reserves for mortgage buybacks, filings show.”

 

Numbers like that represent either a lot of wrongdoing or overpaid lawyers (or both). Either way, it does not suggest well-run organizations that are structured around meeting the needs of their stakeholders, broadly defined. Don’t you just hate it when the statute of limitations will not come round fast enough?

 

“The legal process could be extended if the U.S. attorney general brings more cases and unearths information that can be used in new lawsuits. While some cases have a five-year statute of limitations, those involving bank frauds have a deadline that’s twice as long. The Financial Institutions Reform, Recovery and Enforcement Act, known as FIRREA, has a 10-year limit, and the U.S. used the law against JPMorgan and Bank of America.”

 

Have a good weekend.

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. Bank Legal Bills Exceed $100 Billion

By Donal Griffin & Dakin Campbell

August 28, 2013

Bloomberg

http://www.bloomberg.com/news/2013-08-28/u-s-bank-legal-bills-exceed-100-billion.html

 

Strategic CSR - Walmart

The article in the first url below is interesting not because of the antagonism a local community expressed towards a proposed new Walmart store (Chapter 3: The Walmart Paradox, p102), but because of the lengths to which the local legislature went to prevent the store from opening:

 

“Wal-Mart Stores Inc. said it was scrapping plans to build three stores in Washington, D.C., after the city's council passed a bill late Wednesday that would require big retailers to pay starting wages that are 50% higher than the city's minimum wage. … Wal-Mart had warned in an op-ed article in the Washington Post on Tuesday that it would pull out of the city if the District of Columbia's council passed the bill, called the Large Retailer Accountability Act of 2013.”

 

In particular:                                                        

 

“The bill requires retailers with corporate sales of $1 billion or more and with stores of at least 75,000 square feet to pay workers starting salaries of no less than $12.50 an hour. The city's minimum wage is $8.25. The measure includes an exemption for unionized businesses and gives existing big stores, which include Target Corp. and Macy's Inc., four years to comply.”

 

I am trying to decide whether I am happy at a stakeholder taking a stand and forcing its values onto a firm, or suspicious at a highly interventionist piece of government legislation that is designed to target a particular organization. Ultimately, as noted in the article in the second url below, short-term political considerations (local jobs generation and tax revenues) outweighed the community’s longer-term and less easily-quantifiable concerns (the decline of independent stores and community identity) as the Mayor of Washington DC vetoed the legislation in September:

 

“Wal-Mart, which had threatened to abandon its plan should the bill become law, issued a statement after Gray’s veto last week that it would proceed with plans for at least five stores.”

 

Supporters of the legislation among Council members reiterated their concerns against Walmart and pledged to continue the fight elsewhere:

 

“The bill had become part of a national campaign against the proliferation of low-wage jobs, and it has become entwined locally with Wal-Mart’s plans to open several stores in the city. … ‘This is really about what kind of economic development strategy we want in this city,’ said Chairman Phil Mendelson (D), a supporter of the bill. ‘Creating low-quality jobs, in my view, is not a good economic-development strategy.’”

 

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/

 

 

Wal-Mart Scraps D.C. Store Plans

By Ann Zimmerman

July 11, 2013

The Wall Street Journal

Late Edition – Final

B2

http://online.wsj.com/article/SB10001424127887324879504578598303146519568.html

 

D.C. Council fails to override ‘living wage’ veto, paving way for Wal-Marts

By Mike DeBonis

September 17, 2013

The Washington Post

http://articles.washingtonpost.com/2013-09-17/local/42141817_1_living-wage-veto-current-minimum-wage

 

Strategic CSR - BlackBerry

What I think is interesting about the article in the url below is not that it notes the demise of a once-proud corporation (BlackBerry, previously Research in Motion), but that it makes a strong statement about past behaviors that most likely contributed to its demise. Even more interesting is that the article makes the case that, rather than a shift in technology and consumer tastes, it was the firm’s focus on short-term shareholder value that undermined its competitive position, while contributing little to the long-term wellbeing of the firm:

 

“BlackBerry’s corporate filings show that over the years it distributed $3.5 billion to shareholders. … That is an impressive amount, especially considering that the entire company is now worth only a little more than $5 billion.”

 

What is more important than the focus on short-term value to shareholders, however, is that these actions failed to reward those shareholders the firm should have valued the most—loyal ones:

 

“… loyal shareholders did not receive any of that money. To get the money, an investor had to sell. The money was spent on share buybacks, and most of those buybacks came in 2008 and 2009, when the company was flying high.”

 

In particular, the article makes the damning case that it was the firm’s policy on awarding senior executives stock options that resulted in the narrow focus on share price, which only benefits shareholders when they sell their shares:

 

“BlackBerry’s financial strategy was not particularly unusual, although it does stand out in the way it abused the rules on executive stock options. Perhaps it would never have paid dividends anyway, but those options gave the company’s executives good reasons to avoid dividends and concentrate on share buybacks. … One reason companies that issue a lot of options prefer stock buybacks to dividends is that while buybacks may raise the market value of the stock and thus increase the value of an outstanding option, dividends are less likely to do so. Option holders, unlike shareholders, do not benefit from dividends.”

 

As with many aspects of business so-called “received wisdom” (much of which gets parroted in business school classrooms), the reality does not hold up to the theory:

 

“The net effect: It took in $365 million from the exercise of options. It paid $3.5 billion to repurchase shares. Under accounting rules, that $3 billion difference had no effect on reported profits, but it had a big effect on the resources available to the company for other purposes, like spending on research and development.”

 

The article also has interesting things to say about the value of options versus restricted stock grants (Chapter 6, Case-study: Stock Options, p274):

 

“In practice, companies tend to prefer options when they think the share price will rise, and restricted stock when they are not so confident. That is the way it worked at BlackBerry. The last large option grants to senior executives were made in October 2007. A year later, the stock price had peaked — at $148 in June 2008 — and was down to about $70. No options were granted. Instead, restricted stock units were issued.”

 

All in all, the company behaved badly in relation to its stock option grants and, more importantly, in terms of its focus on valuing its most loyal shareholders:

 

“In 2006, when the backdating scandal broke in the United States, the company piously denied it had done anything of the sort. A few months later, it had to admit it had lied. In the end, top executives surrendered a large number of options, and other options were re-priced. The Securities and Exchange Commission determined that more than 1,400 individual grants had been backdated. … The executives certainly benefited from the purchases. Shareholders who believed in the company’s future did not.”

 

The reasons a company fails are many and varied, but clearly BlackBerry had issues beyond the quality of their products that extended into the executive suite. Creative destruction, commence!

 

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/


How Blackberry Handled Past Wealth

By Floyd Norris

August 23, 2013

The New York Times

Late Edition – Final

B1

http://www.nytimes.com/2013/08/23/business/economy/how-blackberry-handled-prosperity-past.html

 

Strategic CSR - Energy

If you ever feel the need to better understand the importance of energy to the global economy and also the difficulty we face converting to non-carbon fuel sources (and, therefore, avoiding calamitous climate change), the long article in the url below is an education:

 

“Together, fracking and a little-known energy source called methane hydrate—flammable ice—may soon usher in an age of widespread energy independence. In many respects, this would be a miracle. It also might unleash an arc of instability stretching from Nigeria to Saudi Arabia to Siberia—and doom any hope of halting climate change.”

 

The title, alone, suggests the extent of the mess we have created:

“What if We Never Run Out of Oil?”

 

Have a good weekend

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/


What If We Never Run Out of Oil?

By Charles C. Mann

May, 2013

The Atlantic

pp. 48-63

http://www.theatlantic.com/magazine/archive/2013/05/what-if-we-never-run-out-of-oil/309294/

 

Strategic CSR - Ecolabels

The article in the url below wades into the confusion created by companies’ attempts to greenwash via deceptive labels:

 

“Chemicals, of course, are ubiquitous; everything is made from them. But the question is what products are toxic and what are not. Are there labels available to help us distinguish what is safe and what could pose harm to us?”

 

The worst labels are based on either faulty science or on consumer fears (fed by media campaigns) that fly in the face of science:

 

“There has also been a proliferation of labels targeting specific chemicals in packaging, with ‘BPA free’ and ‘phthalate free’ the two most prominent. … So, should consumers feel safer buying a product labelled “BPA free”? No. Even if BPA was harmful – and the weight of evidence suggests it is not – manufacturers have to substitute the demonised chemical with another. The most common replacement for BPA is BPS – a chemically similar ingredient whose only virtue is that it is less tested. Yet its profile is actually more toxic and, unlike BPA, it is non-biodegradable. In this case a ‘BPA free’ label is utterly deceptive.”

 

The key to an effectively misleading label is either to provide too much information, use ambiguous terms that do not have any standardized meaning (such as “natural”), or replace science with ideology in ways that push specific causes, rather than focus on consumer safety:

 

“In 2012, the Washington DC based anti-chemical NGO Environmental Working Group unveiled its online Guide to Healthy Living. … Seventh Generation, the US-based household and personal care products company founded on a commitment to sustainability, has felt the wrath of EWG’s misplaced idealism. … Seventh Generation’s detergents contain boric acid, a harmless chemical – as used – that stabilises its products. Boric acid is also an antiseptic used in vaginal douches and acne medicine. Like many other chemicals that regulatory agencies have determined to be safe, it’s been labelled an ‘endocrine disruptor’ by anti-chemical campaigners – in this case on the basis of one study of borax mine workers exposed to industrial quantities.”

 

Ultimately:

 

“For chemical ecolabels to work, they must be based on consistent, transparent, meaningful and verifiable standards.”

 

Until they are (supported by universally accepted standards and policed by a broadly-recognized authority), labels will continue to confuse. As such, they will continue to provide an economic opportunity for those firms that are willing to take advantage of that confusion.

 

Take care

David

 

David Chandler & Bill Werther

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

© Sage Publications, 2014

 

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

 

 

Ecolabels: Chemical reactions

By Jon Entine

June 4, 2013

Ethical Corporate Magazine

http://www.ethicalcorp.com/environment/ecolabels-chemical-reactions