Strategic CSR - Ben & Jerry's

The article in the url below presents a different take on the debate around the extent to which companies should engage in discussions around social issues:

"Companies ranging from Anheuser-Busch to Disney and BlackRock have recently lost loyal customers and billions of dollars in market capitalization and assets after wading into controversial political issues. The reason customers left and investors bailed is simple: These companies failed to carry out what they had promised in their mission statements."

In essence, the argument is that companies should, first and foremost, stay true to their founding mission, and that it is when they diverge that confusion is caused. Anheuser Busch's mission, for example, is to "Dream Big to Create a Future With More Cheers," while BlackRock promises to "to help more and more people experience financial well-being," both of which suggest a more neutral foundation:

"Clear mission statements are critical for company success. A 2016 Harvard Business Review study found that companies that clearly establish their purpose innovate more successfully and increase revenue faster than companies that don't. That's because clear mission statements explain why a company exists and what it hopes to achieve. They also identify its present—and, ideally, future—customers. This aligns internal employees and external investors in pursuit of a common goal: delivering great products and services to increase shareholder value."

Disney is another example of a company that has gotten itself into trouble, of late, with what some see as a confounding of its guiding purpose:

"[Disney's] stated mission is 'to entertain, inform and inspire people around the globe through the power of unparalleled storytelling, reflecting the iconic brands, creative minds and innovative technologies that make ours the world's premier entertainment company.' Creating movies like 'The Lion King' and 'Star Wars' is on mission. Less so is public criticism of such legislation as Florida's Parental Rights in Education Act, which prohibits the state's educators from teaching about sexual orientation and gender identity in classes from kindergarten through third grade. When Disney announced its opposition to the bill in 2022, the majority of its customers disagreed. Disney's public approval rating cratered to 33% in 2022 from 77% in 2021. Customers spoke with their wallets. The company's streaming service, Disney+, saw canceled memberships, and attendance at Disney theme parks suffered. The company's stock remains depressed even after it swapped in new leadership."

Ultimately, the author is arguing that there should be alignment between mission and behavior. Stakeholders engage with a company based on an understanding of what it is that the company does. If the company suddenly diverges from that, however well-intentioned, then it will confuse stakeholders who had been engaging based on alternative assumptions:

"Anheuser-Busch, Disney and BlackRock could learn about proper mission control from Ben & Jerry's. The ice-cream company has been aligning customers and shareholders behind a progressive and social mission for decades. Its mission states: 'We believe that ice cream can change the world. We have a progressive, nonpartisan social mission that seeks to meet human needs and eliminate injustices in our local, national, and international communities by integrating these concerns in our day-to-day business activities.' When Ben & Jerry's supports returning to Native Americans what it claims is stolen land, when it advocates overturning voter-integrity laws, or when it favors defunding the police, its customers aren't surprised. This is because Ben & Jerry's has been advocating such change since two Vermont hippies founded the company in 1972. When they sold the business to multinational conglomerate Unilever in 2000, they maintained an independent board to make decisions on the company's social mission. Their customers expect this activism and buy such ice-cream flavors as 'Save our Swirled' and 'Empower Mint' to support social causes."

For me, the takeaway is that companies need to be founded based on a strong set of values, and those values should be conveyed to stakeholders clearly, from day 1. That authenticity is what binds stakeholders to companies, because the relationship is based on transparency and trust. It is when companies diverge, often for superficial reasons because they feel pressured to comment/act on the topical issue of the day, that problems arise. A company staying true to its values means refusing to engage in certain issues unless they are consistent with what the firm has believed and how it has acted, all along.

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 

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Why Woke Works for Ben & Jerry's

By Anson Frericks

August 9, 2023

The Wall Street Journal

Late Edition – Final

A17

https://www.wsj.com/articles/why-woke-works-for-ben-jerrys-esg-corporate-mission-statement-shareholder-value-a188402c

 

Strategic CSR - Recycle logo

The article in the url below reveals some of the difficulties with using a simplified, generic (albeit well-designed) logo or label to represent a complex construct. Specifically, the article is talking about the universally-recognized recycling logo:

"The 'chasing arrows' logo, designed by a college student for the first Earth Day in 1970, has become ubiquitous on everything from cartons of milk to shampoo bottles as a way to nudge users to recycle packaging rather than discard it."

The trouble is that the logo is now so widely used that companies are putting it on materials that, while theoretically recyclable, are almost never being recycled, at least not in the U.S. The result is a form of false advertising that the U.S. government wants to prevent:

"At issue is the use of the logo along with the 'resin number' of different types of plastics. Resin one and two plastics, such as bottles and jugs, are the most easily recycled products, but those marked with numbers three to seven, categories that include plastic bags, styrofoam and plastic trays, are typically not recycled and are instead sent to landfills or burned."

Again, the issue is not that these plastics cannot be recycled, it is that they cannot yet be recycled efficiently and, as a result, there is no functioning market for the original materials, once they have been used (see Strategic CSR – Labels):

"A new rule was needed, the agency said, to help clear up this confusion. In 2021, California passed a law to restrict the use of the logo to avoid misleading claims about recycling. Environmental groups are pushing for an end to the blanket use of the logo, too, claiming that its use amounts to 'greenwashing' by companies."

We either need to find a way to recycle these plastics in ways that are efficient and practical (without the plastic degrading so much that the recycled material does not have many practical applications), or we need to reduce the amount of single-use plastic in our lives (a challenge that has its own complications; see Strategic CSR – COVID-19):

"Only around 5% of plastics are recycled in the US, a proportion that has been declining since China announced it would no longer be accepting unwanted plastic waste from western countries in 2018. American households produce around 51m tons of plastic waste a year, more than any other country, with much of that either dumped in landfills, incinerated or littered, often ending up in the ocean."

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 

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Universal 'chasing arrows' recycling symbol could be dumped in US

By Oliver Milman

May 18, 2023

The Guardian

https://www.theguardian.com/environment/2023/may/18/recycling-universal-symbol-chasing-arrows

 

Strategic CSR - M&A

The article in the url below reports on the mining giant, Glencore's, hostile bid to acquire Teck Resources of Canada, for $23 billion. What is interesting about Teck's attempt to resist the takeover, however, is the nature of the defense it is employing – specifically, it is using ESG risk as a reason to argue that the acquisition will ultimately damage Teck as a company:

"Teck has rejected Glencore's offer in part because it doesn't want exposure to Glencore's coal business. It also raised concerns about Glencore's oil-trading business and what it said are potential geopolitical risks in certain countries where Glencore operates. … In a presentation to investors laying out its rationale for rejecting Glencore's offer, Teck cited its higher ranking in some ESG indexes relative to Glencore's, pointing to a 'significant ESG misalignment' between the two companies, according to one slide."

Even more interesting, rather than deny or attempt to deflect the accusation, Glencore has instead defended itself on similar terrain:

"Glencore has said the combined metals business would be a leading player in cobalt, copper and zinc, crucial for the transition to less polluting forms of energy. Glencore has said its oil-trading business is becoming a less significant part of its energy-trading division."

For its argument, Teck points to specific aspects of the two companies' business that appear to conflict, from an ESG perspective:

"Teck said earlier this year that it plans to spin off its coal business from its metals business. Glencore, meanwhile, has said it would run down its coal operations by 2050 and spin its coal business off completely if a majority of its shareholders approves. When Glencore came calling, Teck cited Glencore's continued coal business as part of its rationale for rejecting the deal."

Apparently, this is going to be a feature of future M&A activity (and also IPOs):

"Teck's scrutiny of Glencore's ESG bona fides comes as companies increasingly want to know whether deal targets—and suitors—are a match from an ESG perspective, bankers and lawyers say. It is now becoming part of the due diligence process."

Essential, of course, is whether Teck is genuine in its stance, or whether it is just the latest tactic firms will utilize to try and increase their purchase price:

"Teck may change its tune if Glencore sweetens its offer. Last week, Teck called off a shareholder vote on its plan to spin off its coal business, a surprise that analysts said suggested investors are open to a better offer from Glencore or others."

While Glencore, for its part, may deploy a tactic used in the oil and gas industry, whereby companies spin off the dirtiest parts of their operations to appear more sustainable overall. The operations that are spun off, however, are mostly going private and escaping the kind of oversight and accountability to which publicly-traded firms are exposed:

"Glencore's initial bid, which became public last month, proposed two separate companies for Glencore's and Teck's merged metals and coal businesses. It would then spin off the combined coal business."

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/

Social Issues Dog Glencore's $23 Billion Merger Fight

By Julie Steinberg

May 6-7, 2023

The Wall Street Journal

Late Edition – Final

B2

https://www.wsj.com/articles/environmental-issues-complicate-glencores-23-billion-merger-fight-7df8e96a

 

Strategic CSR - Taylor Swift

The article in the url below offers a contemplation on what it means to be a successful artist, in terms of a commentary on Taylor Swift's dominant year in the mainstream popular conversation:

"Did you know you'll soon be able to take a course in Taylor Swift at Queen Mary University of London? There's already one of these at a university in Belgium: it's called Literature: (Taylor's Version), and starts this autumn. In February, academics will gather in Australia for a high-level 'Swiftposium.' In the US, meanwhile, people fret over the pop star's political power. Last week, with a single Instagram post, she helped register 35,000 new voters in a day. Others concern themselves with Swiftonomics: where Taylor steps, businesses grow and bloom. Three concert nights in Chicago were enough to revive its tourism industry, according to the governor of Illinois. News recently got out that Swift is dating NFL player Travis Kelce. Sales of his jersey are up 400%."

But, the article is also an insight into distorted economies, where an extremely small minority take a lion's share of the wealth generated in those economies:

"'If Swift were an economy,' the president of a major online research company has said, 'she'd be bigger than 50 countries… her loyalty numbers mimic those of subjects to a royal crown.'"

While those artists who earn the majority of the wealth are arguably the most talented, their success is undoubtedly disproportionate. In other words, an artist that is only slightly less talented receives a very small fraction of the wealth of those who are the most talented (or popular):

"Swift, like Bob Dylan, to whom she is often compared, is probably a genius. But is she really 50 countries more of a genius than all those almost-Taylors, artists whose economies still amount to the size of a room in their parents' basements? For Swift stands a Gulliver among Lilliputians: the prize for being one scintilla less talented or lucky is, generally, a life scraping minimum wage. And there's another world too, perhaps a mere breath from this one, where a 33-year-old Swift still struggles in country music clubs and another artist is reigning king or queen."

As in any competitive market, the incentive is to win, and if you win then, increasingly it seems, you do so disproportionately:

"One per cent of musicians hog 90% of the takings. Gaming looks similar, as do the visual arts. As these industries are increasingly globalised, things are getting worse. There is no striving middle class."

This commentary is all an excuse to get to the quote that I found the most alarming in the article:

"On Spotify, artists need 6m streams to achieve the equivalent of a year on the UK's minimum wage."

This evidence is taken from a much drier document – evidence submitted to the Digital, Culture, Media and Sport Parliamentary Select Committee, in the UK:

"Taking Spotify as an example, it is estimated that on average an artist will receive £0.0028 per stream. That means that it would take roughly 3000 steams to make one hour of the UK minimum wage. If you were to have a full-time job, you would work somewhere in the region of 2000 hours a year, with that in mind to make the minimum living wage for the year in the UK you would need 6 Million streams."

I knew Spotify was hard going for artists, but not that hard going. It places a lot in perspective around the economics of music streaming, and why so many content producers see it as a double-edged sword, even while us content consumers revel in the technological advances that are breaking down barriers to access. I always suspected that, while the music is free to me, the cost was being paid by others elsewhere in the system – artists who do not have anywhere near the success of Taylor Swift, even though many of them are nearly as talented (or maybe even as talented, but not as lucky) as she has been in her amazing career.

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 

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We should celebrate Taylor Swift. But her success shouldn't crowd out others

By Martha Gill

September 30, 2023

The Guardian

https://www.theguardian.com/commentisfree/2023/sep/30/taylor-swift-reaps-country-sized-riches-other-artists-squeezed-out

Strategic CSR - Shell

The lead paragraph in the article in the url below is all you need to know to demonstrate how poorly prepared (and invested) we are in addressing climate change:

"Shell's new CEO said the London energy giant will ratchet back low-profit clean-energy investments while pumping out more fossil fuels, a pivot from a period when the biggest European producers emerged as enthusiastic champions of renewable-energy sources. Investors on both sides of the Atlantic in recent months have rejected a buffet of climate pushes. Instead they have preferred the gushers of cash generated by record profits that have been fueled in part by Russia's invasion of Ukraine. That thirst for cash has coincided with continued strong demand for fossil fuels, emboldening Shell and London-based rival BP to defend oil production and dial back aspects of the clean-energy focus they embraced with fanfare just a few years ago."

Correction – not "addressing" the challenge; more like not even trying to address it (or even pretending we are trying to address it).

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 

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Shell Dials Back Green-Energy Plan

By Jenny Strasburg 

June 15, 2023

The Wall Street Journal

Late Edition – Final

B3

https://www.wsj.com/articles/shell-to-lift-dividend-launch-5-billion-buyback-eadf10ed

 

Strategic CSR - Solar eclipse

The article in the url below deals with a complex topic – the independent (and highly flawed, from what I can see) electricity utility that has been structured in Texas; specifically, the Electric Reliability Council of Texas (or Ercot). While I am not qualified to comment in detail on that, I think the article is interesting for two reasons – first, this past summer, the Texas grid needed to rely on renewable energy in order to meet peak demand, for the first time:

"This is the first summer where Texas has needed renewables to meet peak demand, which is usually during daylight hours when the sun is strong, and then bring back-up generation (mostly in the form of natural gas) online to fill the resulting dip in solar output quickly at sunset."

Second, the impending impact of a solar eclipse on October 14 on the ability to generate solar energy in Texas, and the deferred impact that will have on the grid and energy supply, as a whole:

"A major one coming up is an Oct. 14 solar eclipse, which will force almost all of the grid's solar farms to stop generating electricity in the middle of the day. … The sun will begin to darken at 10:15 a.m. US Central time and end by 1:40 p.m. The areas of greatest occlusion will be across a stretch from West Texas to the southeast part of the Gulf Coast, though the entire state will be impacted. At its peak, 76% to 90% of the sun will be obscured depending on the location. That will result in solar panels having only 13% of 'clear sky capability' at the height of the eclipse at 11:50 a.m., an Ercot executive said during a stakeholder presentation Thursday."

The eclipse is due to affect over 50% of the solar electricity generating capacity of the Texas grid:

"Ercot currently has about 22 gigawatts of solar generating capacity, of which almost 13 gigawatts have been operating during the sunniest times of the day this week."

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/

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The Texas grid two step

By Naureen S. Malik

September 8, 2023

Bloomberg

https://www.bloomberg.com/news/articles/2023-09-08/texas-s-grid-faces-october-solar-eclipse-challenge-blackout-risk

 

Strategic SCR - Space junk

Not satisfied with just polluting the Earth, the article in the url below demonstrates how we are also doing a great job of polluting space:

"The US Federal Communications Commission (FCC) has issued its first fine to a company that violated its anti-space debris rule, the commission announced Monday."

Unfortunately, the size of the fine is not going to act too much as a deterrent, but surely a mark of our progress that we are causing an equal amount of damage to the cosmos as to our own home:

"Dish Network has to pay $150,000 to the commission over its failure to de-orbit its EchoStar-7 satellite which has been in space for more than two decades. Instead of properly de-orbiting the satellite, Dish sent it into a 'disposal orbit' at an altitude low enough to pose orbital debris risk."

I suppose the only thing more arrogant than Dish Network casually polluting space, is the FCC assuming it is the correct authority to police space:

"'As satellite operations become more prevalent and the space economy accelerates, we must be certain that operators comply with their commitments,' said Enforcement bureau chief Loyaan A Egal, in the statement announcing the Dish settlement. 'This is a breakthrough settlement, making very clear the FCC has strong enforcement authority and capability to enforce its vitally important space debris rules.'"

And, guess what? The problem is only going to get worse and will hamper future progress:

"'Right now there are thousands of metric tons of orbital debris in the air above – and it is going to grow,' FCC chair Jessica Rosenworcel said in a 2022 statement that accompanied the announcement of the rule. 'We need to address it. Because if we don't, this space junk could constrain new opportunities.'"

Who knew that pollution was such an impediment?

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 

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US government issues first-ever space debris penalty to Dish Network

By Abené Clayton

October 2, 2023

The Guardian

https://www.theguardian.com/science/2023/oct/02/fcc-space-debris-fine-dish-network-satellite

 

Strategic CSR - Value

The article in the url below is a radio interview, held a decade after the 2008 Financial Crisis, with the author of a book that had just been released, The Value of Everything: Making and Taking in the Global Economy (2018). The author's goal in writing the book, and why I found it interesting, was to redefine (or perhaps 'recapture' is more accurate) what we understand to constitute value.

To summarize: In calling for a broader theory of value in a wide ranging discussion (in the interview), the author draws a distinction between value determining price (previously) and price determining value (today) – a change she argues has occurred over the last couple of hundred years. In other words, previously, the more we valued the way something was produced, the more we would be willing to pay for it (emphasizing trades people and artisanal skills). This compares to today, where the author argues we now have it backwards because we interpret the price itself as determining how much we should value the product or service – in other words, things that are expensive are, by definition, more valuable to us than things that are cheaper. This same logic can be extended to resources such as labor, which is today valued by wage levels (generally determined at the intersection of demand and supply), rather than necessarily the nature of the work that is performed. In other words, we reward rarity, simply for the sake of being rare, rather than rewarding the work that delivers the most happiness or social value, or some other metric, which we used to do and the author thinks is a more commonsensical understanding of what we should value.

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 

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A New Way to Calculate Economic Value

The Brian Lehrer Show

September 10, 2018

WYNC

https://www.wnyc.org/story/new-way-calculate-economic-value/

 

Strategic CSR - Green-hushing

The article in the url below suggests that, in the face of growing polarization around ESG-related issues, companies are engaging in more "green-hushing":

"Executives at U.S.-listed companies mentioned 'environmental, social and governance,' 'ESG,' 'diversity, equity and inclusion,' 'DEI' or 'sustainability' on 575 earnings calls from April 1 to June 5, down 31% from the same period last year. … That is the largest such year-over-year decline and the fifth consecutive quarter of year-over-year drops, following a pickup in these discussions and corporate social efforts in the wake of the police killing of George Floyd in May 2020."

The chart in the article highlights the definite trend that emerged over the last couple of years:

 

Although executives are talking less often about the variety of issues that fall under the ESG umbrella, there does not seem to be any less action (which is encouraging):

"While such instances of 'green-hushing' may be part of a larger strategy for many companies to avoid weighing in on divisive issues, there is little sign that public companies are pulling back from the initiatives themselves, such as DEI employee training and emissions reductions. Companies still regularly voluntarily issue detailed sustainability reports, disclose greenhouse-gas emissions and tie a portion of their executive compensation to ESG metrics. Businesses are also busy preparing soon-to-be-unveiled new climate-disclosure requirements from the Securities and Exchange Commission by creating systems for collecting data and managing future compliance costs."

This reminds me of Walmart, which has long engaged in best-practice sustainability issues in its supply chain, but does not advertise their progress to their customers. Research suggests that customers who see a "green" product assume that it is priced as a premium product, even though it could easily be cheaper. But, Walmart is most concerned about its price sensitive customers and perceptions around value (rather than actual value), so better for the firm to engage in the practice, but not tell anyone about it.

This is opposite to a strategic CSR approach to business. Much better, in my opinion, to stand behind a clear set of values and run the business accordingly. In my mind, that generates greater loyalty to the firm among all stakeholders, which is essential in order to operate the business at its optimal potential.

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/

Companies Seek to Avert Backlash, Avoid Talk of Social, Green Issues

By Mark Maurer

June 13, 2023

The Wall Street Journal

Late Edition – Final

A1-2

https://www.wsj.com/articles/executives-quiet-their-sustainability-talk-on-earnings-calls-amid-growing-culture-war-3a358c1f

 

Strategic CSR - Oatly

I saw this ad in main section of The Sunday New York Times on May 7 (pp.18-19), earlier this year:

Several thoughts on this (and Oatly, which I featured favorably in a prior newsletter; see Strategic CSR – Oatly):

First, Tropicana was one of the earliest brands to calculate the carbon footprint of their orange juice, more than 10 years ago (see Strategic CSR – PepsiCo). What is interesting is that, at that time, I recall they did not advertise the number – the wanted the knowledge primarily to improve their operating/supply chain efficiency. But, if marketing is central to the effort, as it obviously is for Oatly, then there are two questions that are essential – how accurate is the number (are they counting everything that needs to be counted; there are real issues with scope 3 emissions, let along scope 4 – see Strategic CSR – Scope 4 emissions) and does anyone understand it? It will not cause any change in behavior unless customers understand what that number means and can compare it to competing products (the absence of consistent numbers across companies and industries is why all the ESG stuff has been essentially meaningless, so far; see Strategic CSR – ESG).

Second, Oatly is not as good a product as I originally thought. It tastes great, but the reason is that it is stuffed full of sugar. My doctor told me the golden rule is that the amount of protein needs to be greater than the amount of sugar, and I think in Oatly it is the same, 5g of both (if I am remembering the numbers correctly). Fairlife (a Coke product) is much better on this metric – lactose free and much more protein than sugar.

So, the danger with so many of these initiatives at present (because there is no standardization) is that Oatly draws consumers' attention to this work that they are doing (which is no doubt well-intentioned, but may or may not be meaningful – really hard to know without a lot of digging) as a way of concealing the fact that their product is not that much different than drinking a can of soda.

For more information on some of Oatly's progressive approach to this issue, see: https://www.oatly.com/en-us/stuff-we-sell/climate-footprint

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 

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Strategic CSR - Diamonds

The article in the url below suggests that artificial (man-made) diamonds are beginning to make serious inroads into the market for natural diamonds:

"More than a third of all engagement rings with center stones purchased last year were created in a lab, according to an online survey of nearly 12,000 U.S. couples. … That's double the number from 2020."

Since the survey data are self-reports, the results might be dismissed by some but, if there is a bias, I would expect it to be in favor of inflated numbers for real diamonds. More important, I think (and missing from the report), is whether it is price or values that is driving demand. A natural diamond takes millions of years to be created and then, of course, needs to be mined under conditions that are often far from ideal. Artificial diamonds, on the other hand, clearly do not take quite so long and are much more accessible (and ethical):

"Man-made diamonds are grown by placing a diamond seed in a sealed chamber with a carbon-containing gas such as methane. The carbon atoms bond like a lattice to the seed, building up a diamond crystal. It takes about 600 hours to grow one carat depending on the method. Their appeal, according to lab-diamond makers, is that they cause less environmental and human damage than mining diamonds from the earth as well as their cheaper price."

As a result, it is assumed, their popularity is spreading:

"It's not just engagement rings. Diamonds grown in a lab accounted for 13.6% of the $88.6 billion in diamond jewelry sold globally in 2022, up from less than 1% in 2015 where they had hovered since the early 2000s."

Specifically, the goal (for supporters) is to eradicate the possibility of an unethical supply chain:

"Proponents of man-made diamonds say growing diamonds in a lab helps stamp out conflict diamonds, or diamonds mined in war-torn regions and used to fund insurgencies. [In response] The mining industry says it traces the origins of diamonds to help stop the flow of conflict diamonds under what is called the Kimberley Process."

But, even if the primary motivating factor is morality (and the environmental angle is interesting), it is not clear there is an easy choice, as the main lobbing group for the diamond industry is getting better at arguing:

"'Consumers are being told that lab-grown diamonds are sustainable and that couldn't be further from the truth,' says David Kellie, CEO of the Natural Diamond Council, a diamond mining trade group. The group began airing videos on social media in April as part of what it calls a 'myth-busting' campaign. According to a new report by the group, more than 60% of lab-grown diamonds are made in China and India, where climate-polluting coal is the major power source. The report also touts efforts by the mining industry to cut carbon emissions and boost the economies of countries with major diamond mines such as Botswana and Namibia."

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/

This Wedding Season, Diamonds Face a Challenge

By Suzanne Kapner

April 29-30, 2023

The Wall Street Journal

Late Edition – Final

B1, B6

https://www.wsj.com/articles/this-wedding-season-diamonds-face-a-challenge-171c9e7

 

Strategic CSR - #boycott

The article in the url below raises a question that is central to the challenge of strategic CSR – how do firms know what their stakeholders truly care about? More specifically, it focuses on the intersection of strategic CSR and social media, and the extent to which firms should view online 'protests' as a valid indicator of stakeholder values:

"Amanda Booth first witnessed the phenomenon of labeling yourself progressive online while endorsing different values in real life when her white coworkers mentioned buying property in East Austin. The area is popularly known as a redlined neighborhood, primarily housing Austin's Black and brown community. Recently, the East Side has undergone major renovations with new modern houses, trendy bars, and local coffee shops, as gentrification pushes out the original inhabitants of the area. But when Booth, a 24-year old content designer in Austin, confronted her coworkers by explaining that Black and Hispanic people were being displaced from the area, her remarks were met with silence. 'Both of these guys proudly express themselves as being more on the progressive side of the Democratic party,' Booth said. 'Mind you, both of them have houses on the East Side now.' 'It's not enough to believe in racial justice and that Black people deserve things. White people need to begin giving up their privilege. The least they can do is try to plug into Austin's anti-displacement efforts. But I don't really see those people doing that,' Booth continued."

In prior newsletters, I have highlighted instances where companies acted in ways that led to consumer/public backlash (including negative headlines and #boycott protests online), but that did not affect future performance (e.g., Strategic CSR – Uber, Strategic CSR – United, and Strategic CSR – United Airlines). Clearly, all such examples are complicated and, to some extent, idiosyncratic. But, the fact that there are multiple examples suggests that, just because an online #boycott campaign erupts, that should not necessarily be taken as a sign by companies that their stakeholders actually mean what they say (or, at least that a meaningful proportion of them are serious in their online pledges to boycott).

So, what is the takeaway – that firms should not care what is written about them online? Probably not, but I do think that asking stakeholders what they care about is likely the least effective way of finding out. Much of what happens on social media is performative and, at best, captures the social temperature at a moment in time. Such momentary indicators should probably not drive firm strategy. Much better to ensure all action is consistent with the firm's professed values (which should be determined via discourse with stakeholders), and then ride out any criticism that follows. I am guessing if Budweiser had done that over the summer, for example, they may still be making the best selling beer in the U.S.

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/

White clicktivism: Why are some Americans woke online but not in real life?

By Brianna Holt

December 9, 2020

The Guardian

https://www.theguardian.com/world/2020/dec/09/white-liberals-social-media-activism

 

Strategic CSR - Homelessness

I love buildings that have been designed intentionally to serve multiple purposes in the community. A good example is a "new family homeless shelter" in Washington D.C. that is described in the article in the url below and was named after "Aya" ("a benevolent soul in Turkish mythology"):

"The facility, … completed in 2021, aims to live up to its name. The Aya is part of a citywide effort spearheaded by DC Mayor Muriel Bowser in 2016 to create a series of neighborhood homeless shelters, one in each of the city's eight wards. Tasked with designing a 50-unit facility for Ward 6, [the architects] enlisted local residents for their input. The firm's design reflects their priorities …. Neighbors wanted a building that looked hopeful, not bleak."

Moreover, the local community asked that the building should not have a discernable front or a back:

"That means that on top of incorporating the special needs of a shelter for families experiencing homelessness, the designers made sure that the Aya has no face — or rather, four different faces. Each side of the building expresses a different function for the families staying at the shelter. … 'Each façade of the building is telling its own story.'"

There are a number of other features that reinforce the idea that this building is part of the solution for those who live in it, rather than exacerbating the problem, which is a big part of modern-day urban life in the U.S.:

"Families that stay at the shelter are quite young: The average age for children there is 3. So the city required it to offer safe spaces for play. [The architects] designed a series of outdoor-style indoor play rooms on the building's east side, rooms that climb in a stair-wise pattern up the building. Brick brise-soleil screens along these rooms offer a playful mirror of the architectural textures found in mid-century apartment buildings in the neighborhood."

One of the challenges of being a European living in the U.S. (after several years living in Japan) is coming to terms with the level of homelessness that is a very present part of the society in which I live. In short, homelessness is generally not a problem that you see in Europe, or other developed countries like Japan or South Korea. That means there are solutions that work in those countries that are not being applied here in the U.S., for whatever (likely ideological) reason. On that, the article in the second url below presents a fascinating re-framing of the problem, arguing that homelessness is purely a function of the amount of affordable housing in a society. The article also makes clear that homelessness is most definitely not caused by "drug abuse and mental illness," or even climate. Such ailments might be characteristics of homelessness, but not the main cause. This is clear when you realize that homelessness is not experienced equally across the country, but collects in very specific places where housing costs are high, which is most often in areas that are growing in popularity. So much so that, homelessness is really only a problem in those cities that everyone wants to move to:

"Why is this so? Because these 'superstar cities,' as economists call them, draw an abundance of knowledge workers. These highly paid workers require various services, which in turn create demand for an array of additional workers, including taxi drivers, lawyers and paralegals, doctors and nurses, and day-care staffers. These workers fuel an economic-growth machine—and they all need homes to live in. In a well-functioning market, rising demand for something just means that suppliers will make more of it. But housing markets have been broken by a policy agenda that seeks to reap the gains of a thriving regional economy while failing to build the infrastructure—housing—necessary to support the people who make that economy go. The results of these policies are rising housing prices and rents, and skyrocketing homelessness."

More specifically, because these supercities in the US are largely Democratic, the article argues it is the liberal policies advocated in these areas that are fueling the homeless crisis:

"Liberals have stated preferences that housing should be affordable, particularly for marginalized groups that have historically been shunted to the peripheries of the housing market. But local politicians seeking to protect the interests of incumbent homeowners spawned a web of regulations, laws, and norms that has made blocking the development of new housing pitifully simple. This contradiction drives the ever more visible crisis."

It naturally follows that the solution is to build more housing – more affordable housing in those cities to which people want to move means less homelessness:

"Houston's success in combatting homelessness—down 62 percent since 2011—suggests that a focus on moving people into permanent supportive housing provides a road map to success. (Houston is less encumbered by the sorts of regulations that make building housing so difficult elsewhere)."

Although, initially, more housing will stem the price increases of those (loyal voters) who already own their own home; ultimately, it should make these cities even more livable (and desirable) because there should be less incidents of homelessness.

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/

A DC Homeless Shelter with Many Faces

By Kriston Capps

December 10, 2022

Bloomberg

https://www.bloomberg.com/news/features/2022-12-10/a-multifaceted-design-to-shelter-homeless-families-in-dc

The Obvious Answer to Homelessness: And why everyone's ignoring it

By Jerusalem Demsas

December 12, 2022

The Atlantic

https://www.theatlantic.com/magazine/archive/2023/01/homelessness-affordable-housing-crisis-democrats-causes/672224/

 

Strategic CSR - Climate justice

The article in the url below suggests a meaningful step to making progress on climate change, and reinforces the sense that the vehicle to achieving this progress will increasingly be the courts (see Strategic CSR - Danone):

"A UN resolution was adopted [in March] that should make it easier to hold polluting countries legally accountable for failing to tackle the climate emergency, in a vote which was hailed as a historic victory for climate justice."

What makes this decision different, the article suggests, is that it helps define the responsibilities that state actors have to prevent climate change:

"The UN general assembly adopted by consensus the resolution spearheaded by Vanuatu, a tiny Pacific island nation vulnerable to extreme climate effects, and youth activists to secure a legal opinion from the international court of justice (ICJ) to clarify states' obligations to tackle the climate crisis – and specify any consequences countries should face for inaction."

As made clear in the reaction to the decision, it is those countries who had little to no role in producing the carbon that is now saturating our climate (and also did not see any of the economic benefits that it allowed) who will face some of the worst results of that pollution:

"'We are just ecstatic that the world has listened to the Pacific youth,' said Cynthia Houniuhi, president of Pacific Island students fighting climate change (PISFCC). 'Through no fault of our own, we are living with devastating tropical cyclones, flooding, biodiversity loss and sea level rise. We have contributed the least to the global emissions that are drowning our land.'"

The advantage of the resolution, from the perspective of its advocates, is that it helps lay out a legal process for determining culpability:

"The resolution, which was co-sponsored by more than 120 countries including the UK, but not the US, will help establish a legal litmus test of sorts for the global climate justice movement seeking to hold countries to account for climate failures in the courts. … In essence, the ICJ advisory will help establish whether there is legal obligation for countries to do what they have committed to in non-binding treaties such as the 2015 Paris climate accord, and whether failure to do so can be challenged through litigation."

But, as with most collective action taken in the name of combatting climate change, enforcement will be the defining factor as to whether this moves the needle, at all, and also the most challenging aspect of the decision to implement:

"While the opinion from the world's highest court will not be binding in domestic courts, establishing international legal rules can be influential on judges and governments. It also represents the first attempt to establish climate action obligations under international law, which advocates hope will strengthen climate-related litigation by helping vulnerable states and advocates hold countries accountable for their action and inaction."

As with any action that is perceived to be unfair, or even illegal, it is not the action itself that determines culpability, but the attempt to hold the actor to account by others that matters. In the U.S., for example, a law can be passed at a lower level, and implemented and enforced for years (even decades), but it is only when someone takes the time to sue that the law itself can be challenged and might be determined unconstitutional. It is always our willingness to hold others to account, in reality, that determines the behavior that is sanctioned or prohibited by society:

"The resolution emerged out of mounting frustration at the mismatch between the global community's rhetoric and action on climate change, amid escalating losses for countries such as Vanuatu, which face an existential threat due to sea-level rise. The frustration spurned a social movement led by Vanuatu law students turned youth activists, and work on the resolution was led by Indigenous lawyers in the Pacific."

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/

United Nations adopts landmark resolution on climate justice

By Nina Lakhani

March 29, 2023

The Guardian

https://www.theguardian.com/environment/2023/mar/29/united-nations-resolution-climate-emergency-vanuatu

 

Strategic CSR - Sesame

File the article in the url below under the category of unintended consequences (see also Strategic CSR – Jevons Paradox; Strategic CSR – Dodd-Frank; and Strategic CSR – Unintended consequences). The issue is sesame allergies in children, and the responsibilities companies have to clearly label their food products with all ingredients and prepare them in a way that is consistent. On January 1, this year, the government introduced legislation in the U.S. that was designed to strengthen these responsibilities. In other words, if there was no sesame in the ingredients, companies were compelled to adequately clean their equipment to eradicate the possibility of contamination. Crucially, the new higher standards only applies to products that already have sesame as an ingredient. Straightforward, right?

"On Jan. 1, a law intended to safeguard the more than 1.5 million Americans with a sesame allergy … took effect. The law mandates, among other things, careful cleaning to prevent cross-contact between food products with and without sesame."

Apparently not. Because the companies felt a zero-tolerance approach to compliance was too difficult for them to guarantee, they instead started adding small amounts of sesame to products that normally did not have any as a way of skirting the law. This change has had predictable consequences for children who have sesame allergies:

"The result? Foods that sesame-allergic kids and adults have eaten safely for years are now potentially life-threatening."

What is interesting about this legislation, though, is that it is far from unique:

"The Food Allergy Safety, Treatment, Education and Research (Faster) Act mandates careful cleaning of manufacturing equipment to ensure foods are sesame-free or clear labeling of all foods with sesame — many foods previously were labeled only as containing tahini, which is made from ground sesame, for instance. Similar laws have protected millions of Americans allergic to peanuts, tree nuts, milk, eggs, wheat, soy, fish and shellfish for nearly two decades. Like those foods, sesame can provoke allergic reactions from mild to life-threatening."

Whatever the explanation, companies are being explicit about the response they made, seemingly with little concern for the implications for those who the legislation was intended to protect – allergic children:

"Some in the food industry say adding sesame flour is the safest path forward. They contend that they can't sufficiently clean their equipment to guarantee it is free of sesame, as the Faster Act requires. And, under federal labeling rules, they can't state that their products contain sesame unless the items actually contain it — so they're adding sesame and labeling it."

And, of course, they are not doing anything illegal. There is nothing to say that a product cannot contain sesame, as long as it is clearly labelled. The frustrating thing for parents of children with these allergies, however, is that they are now forced to re-check all the food products they had previously determined were safe for their kids. Needless to say, the companies do not advertise their change; they simply alter the ingredients listed on the label:

"Because companies are adding sesame in the form of flour, not seeds, the added allergen is invisible to the eye, making it more dangerous — especially when food is served in group settings, like schools and summer camps, where labels aren't nearby, advocates say."

The fact that legislation like this is far from unique makes the corporate response more frustrating is it appears to be the first time it is happening (whereas, previously, they complied). It could be that the legislation is more onerous in this case, but that is not suggested in the article. More likely, it seems the companies just could not be bothered to comply and that adding a little bit more of another ingredient to the product (even though there is no beneficial impact in terms of that product) was the easiest response:

"'There was no hint that this would happen, because companies had not done this with the other eight allergens [specified in federal law], and this isn't happening in other countries that label for sesame,' said Sen. Chris Murphy (D-Conn.), one of the bill's co-sponsors."

As a result, the only reason that sesame flour is now an ingredient in many products (there are lots of examples in the article) is because it helps companies avoid complying with a law that would increase their costs. The companies themselves, of course, are presenting their response to the legislation as an attempt to increase customer safety:

"The American Bakers Association did not respond to questions about adding sesame flour. Instead, it provided a statement from Lee Sanders, its senior vice president of government relations and public affairs: 'The wholesale baking sector prioritizes consumer safety. Baking companies are working with their customers, including restaurants, to transparently disclose any allergen labeling changes to help ensure consumer safety.'"

The response of parents with allergic children who are now threatened, is slightly different:

"Manufacturers 'could have done the right thing, and they didn't,' said Brubaker-Flood, the mom from Michigan. 'They had ample time to come up with new procedures to prevent cross-contamination, and instead they took the crazy route and deliberately added an allergen instead.'"

For more on this issue, see the article in the second url below.

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/

To comply with a new sesame allergy law, some businesses add – sesame

By Karen Weese

April 11, 2023

The Washington Post

https://www.washingtonpost.com/wellness/2023/04/11/sesame-allergy-law-consequences/

Sesame Labels Backfire for Allergic

June 15, 2023

The Wall Street Journal

Late Edition – Final

A6

https://www.wsj.com/articles/sesame-allergy-sufferers-wanted-warning-labels-they-got-more-sesame-283c70ce