Strategic Corporate Social Responsibility

Wednesday, November 3, 2010

Strategic CSR - Google

The article in the url below reminded me of Google Flu Trends, which was released two winters ago and uses online Google searches of flu-related symptoms and medicines to predict flu epidemics (see Strategic CSR – Google, November 14, 2008, below). Along similar lines, Google is now experimenting with a Google Price Index:

"Google is using its vast database of web shopping data to construct the Google Price Index – a daily measure of inflation that could one day provide an alternative to official statistics."

Using this technology to identify underlying trends in human behavior is valuable for two main reasons:

• First, it measures actual behavior, rather than some abstract construction of theoretically relevant activities.

• Second, it is significantly more efficient than alternative (more traditional) means of collecting similar information:

"The work by Google's chief economist, Hal Varian, highlights how economic data can be gathered far more rapidly using online sources. The official Consumer Price Index data are collected by hand from shops, and only published monthly with a time lag of several weeks."

As barriers to the free flow of information continue to break down (Figure 4.4, p102), the effect is a broad democratization of power that resists manipulation. Previously, firms were able to control the message they wanted to convey about their organization and brands by controlling the information flow. As control over information is diffused, control over the message for a firm becomes much more difficult. The result should be a more honest, open relationship between firms and their stakeholders. Those firms that continue to mislead key stakeholders and are discovered will be punished. In such a global business environment, those firms that strive to meet the needs of a broad segment of stakeholders are more likely to flourish.

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/

Google to measure inflation by using web data
By Robin Harding in Denver
330 words
12 October 2010
Financial Times
London Ed1
01
http://www.ft.com/cms/s/2/deeb985e-d55f-11df-8e86-00144feabdc0.html
or
http://www.buzzbox.com/top/default/preview/google-to-measure-inflation-by-using-web-data/?clusterId=2117309&id=9866332&topic=google%3Ainflation

From: David Chandler {msbbe096}
Sent: Friday, November 14, 2008 11:44 AM
Subject: Strategic CSR - Google

The two articles in the urls below demonstrate the power of the internet to re-shape the way information is communicated around the globe (Chapter 1: Globalization and the Free Flow of Information, p20; Issues: Internet, p237). This phenomenon will continue to evolve in ways that we have not yet even begun to imagine (at least, those of us who do not work for Google):

“You can Google to get a hotel, find a flight and buy a book. Now you may be able to use Google to avoid the flu.”

The philanthropic arm of the internet search company (http://www.google.org/) has released a new service (http://www.google.org/flutrends/) that will track internet search terms related to the flu nationally (e.g., “cough” or “fever”) and use this information to help identify potential outbreaks of the illness:

“It displays the results on a map of the U.S. and shows a chart of changes in flu activity around the country. The data is meaningful because the Google arm that created Flu Trends found a strong correlation between the number of Internet searches related to the flu and the number of people reporting flu symptoms.”

This information is powerful because of the speed with which it identifies early trends to which government agencies and health providers can then react:

“Tests of the new Web tool from Google.org, the company's philanthropic unit, suggest that it may be able to detect regional outbreaks of the flu a week to 10 days before they are reported by the Centers for Disease Control and Prevention.”

I believe that firms are just beginning to appreciate the ways in which these communication tools will affect their operations and reputations. What seems apparent, however, is that the affect will be dramatic and that firms that are not transparent and accountable to their stakeholders will suffer as a result.

Have a good weekend.
David

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

Sniffly Surfing: Google Unveils Flu-Bug Tracker
By Robert A. Guth
1070 words
12 November 2008
The Wall Street Journal
D1
http://sec.online.wsj.com/article/SB122644309498518615.html

Aches, a Sneeze, a Google Search
By MIGUEL HELFT
1267 words
12 November 2008
The New York Times
Late Edition - Final
1
http://www.nytimes.com/2008/11/12/technology/internet/12flu.html

Monday, November 1, 2010

Strategic CSR - Nike

The article in the url below presents a challenging issue for Nike in relation to its complex supply chain:

“This may be a watershed moment,'' Scott Nova, executive director of the Worker Rights Consortium, a group of 186 universities that monitors factories that make college-logo apparel, said. ''Up until now, major apparel brands have steadfastly refused to take any direct financial responsibility for the obligations to the workers in their contractors' factories. Now the most high-profile sports apparel firm has done just that.”

Nike’s response to the specific incident that sparked the campaign was generous:

“Facing pressure from universities and student groups, the apparel maker Nike announced on Monday that it would pay $1.54 million to help 1,800 workers in Honduras who lost their jobs when two subcontractors closed their factories. Nike agreed to the payment after several universities and a nationwide group, United Students Against Sweatshops, pressed it to pay some $2 million in severance that the two subcontractors had failed to pay.”

The ramifications for Nike of not paying were potentially harmful to its brand:

“The University of Wisconsin, Madison terminated its licensing agreement with Nike over the Honduran dispute, and Cornell warned that it would do the same unless Nike resolved the matter.”

Whether or not the firm should have paid, however, is open for debate. A quick test: By responding to pressure from student activists at universities and agreeing to compensate the employees of a different company (albeit, a supplier) for actions committed by that firm’s management, Nike is doing which of the following?

1. Wasting its money.

2. Writing a (relatively small) check to avoid a situation it cannot win and protect its brand (and licensing agreements).

3. Shrewdly placating an important stakeholder group who potentially represent the views of a sizable consumer segment.

4. Integrating CSR throughout its supply chain.

5. Acting ethically and morally.

I favor “All of the above.”

While Nike certainly should seek to sever ties with firms that are not acting responsibly and not willing to reform (and, if this is one in a string of transgressions, my view changes), it seems difficult to hold the firm responsible for compensating the employees of another firm for ethical transgressions committed by managers of that firm.

Apart from anything else, Nike’s payment sets a precedent that, potentially, holds a firm liable to a whole range of actions:

- What if a supplier pollutes the local river – should Nike pay to clean it up?

- What if a contractor’s sub-contractor treats its employees in a similar way – should Nike compensate them, too?

- What about if the rubber plantation owner that produces the rubber that eventually finds its way into a Nike sneaker only pays his/her employees a minimum wage, rather than a living wage – is it Nike’s responsibility to make up the difference?

If you agree or disagree, I would be interested to hear why.

For additional commentary on this article/issue, see Toby Webb’s blog entry at http://ethicalcorp.blogspot.com/2010/07/again-has-nike-provided-watershed.html:

“Nike deserves huge praise here. This is a company that is still (unfairly) synonymous, in the eyes of many, with sweatshops, yet has done as much as any company to tackle the issues head on. … Many other companies, and by that I mean 99.99% of the other firms in the sector, would have shut up shop and refused a compromise deal such as this.”

Friday, October 29, 2010

Strategic CSR - Ecological Disasters

The article in the url below from last summer should help get your weekend off on the right note:

“While it's probably still too soon to celebrate, BP appears to finally be getting the oil spill in the Gulf of Mexico under control. But many of the world's greatest environmental catastrophes continue, with no end in sight.”

All of the events featured in the article are truly global, ecological “disasters”—massive numbers and devastating consequences. The statistics relating to long-standing coal fires in China, in particular, are staggering. Underground coal seems in Inner Mongolia have caught fire (presumably because of explosions) and have been burning constantly since “the early 1960s”:

“Covering an area more than 3,000 miles long, China's northern coal fires are estimated to destroy as many as 20 million tons of coal per year, more than the entire annual production of Germany. According to some estimates, these fires could be the cause of up to 2 to 3 percent of the world's carbon emissions from burning fossil fuels.”

Another amazing statistic, this one related to the pollution of the world’s oceans:

“According to the U.N. Environment Program the world's oceans contain 46,000 pieces of plastic per square mile. These plastics are responsible for the deaths of more than a million seabirds and 100,000 marine mammals every year.”

And I worry if I fail to recycle a plastic bottle! It puts the task ahead of us in perspective.

Have a good weekend.
David

Bill Werther & David Chandler
Strategic Corporate Social Responsibility: Stakeholders in a Global Environment (2e)
© Sage Publications, 2011
http://www.sagepub.com/strategiccsr2e/

Instructor Teaching Site: http://www.sagepub.com/strategiccsr/
The library of CSR Newsletters are archived at: http://strategiccsr-sage.blogspot.com/

The World’s Ongoing Ecological Disasters
By Joshua E. Keating
Foreign Policy
July 16, 2010
http://www.foreignpolicy.com/articles/2010/07/16/the_world_s_worst_ongoing_disasters

Wednesday, October 27, 2010

Strategic CSR - Voluntary vs. Mandatory

The article in the first url below provides an excellent example of the ability of effective, targeted legislation to shift incentives and rapidly change consumer behavior (Issues: Compliance, p310). In particular, this example concerns a 5 cents tax on shopping bags (both plastic and paper) in Washington DC that was introduced in January, 2010:

“Prior to the law, residents used an estimated 270 million disposable bags a year, according to the city's chief financial officer. … an informal survey of corporate headquarters for grocery stores and pharmacies with dozens of locations in the city estimated a reduction of 60% or more in the number of bags handed out.”

The article/graphic in the second url below demonstrates how similar incentive structures can be used to “nudge” people in the direction of greater societal value in various settings, while still maintaining the freedom to make less than optimal choices. This example presents the dramatic shifts in eating behavior achieved through subtle changes to the layouts of school cafeterias:

“A smarter lunchroom wouldn't be draconian. Rather, it would nudge students toward making better choices on their own by changing the way their options are presented. One school we have observed in upstate New York, for instance, tripled the number of salads students bought simply by moving the salad bar away from the wall and placing it in front of the cash registers.”

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/

Capital Takes Bag Tax In Stride
By Sara Murray and Sudeep Reddy
995 words
20 September 2010
The Wall Street Journal
http://online.wsj.com/article/SB10001424052748704505804575484162110213150.html
or
http://www.bagcounter.com/news/Capital-Takes-Bag-Tax-in-Stride.shtml

Lunch Line Redesign
By BRIAN WANSINK, DAVID R. JUST and JOE McKENDRY
261 words
22 October 2010
The New York Times
Late Edition - Final
35
http://www.nytimes.com/interactive/2010/10/21/opinion/20101021_Oplunch.html

Monday, October 25, 2010

Strategic CSR - Media

The article in the url below discusses an interesting graphic (http://awesome.good.is/transparency/web/0912/all-the-news/flash.html) that depicts the relative importance of news stories in 2009 in terms of the amount of media coverage received. The map is based on data collated by the Pew Research Center for Excellence in Journalism.

The focus of the article is the extent to which the issue of climate change was covered in newspapers worldwide in 2009 and, therefore, its relative importance as a global news story. Unfortunately, the analysis is not very promising:

“Journalists worldwide published more than 32,400 articles on climate change in last year, yet the coverage was not enough to warrant a spot on a map showing major news events of 2009.”

In other words, in spite of the Copenhagen summit in December and the growing acceptance of the science behind climate change, the environment still does not rank as one of our society’s highest priorities (at least, in terms of news coverage):

“Tiger Woods' adultery, the "Balloon Boy," even the White House party crashers all earned a spot; climate change – and the environment in general – didn't make the cut.”

The author looks for the positive in the story, emphasizing the increase in total climate change articles over 2008’s number, but the bottom line is still somewhat depressing:

“"It's hard to get exciting news about global warming," said Robert Brulle, a sociologist at Drexel University who studies the state of news coverage. "You end up with this real problematic coverage. The coverage is not the science, it's these political-economic-social angles." Brulle has been tracking national television coverage of climate. His numbers are more dismal than Boycoff's newspaper trends: In 2008 he found 73 nightly TV news reports on climate; 2009 had 58.”

Friday, October 22, 2010

Strategic CSR - Trash

The website in the url below contains some interesting points and links to other insightful articles about trash. The featured article focuses on the amount of waste humans produce and what that says about us (Issues: Environmental Sustainability, p319). For example:

“Why have we developed, or, rather, why have we found ourselves implicated in a system that not only generates so much trash, but relies upon the accelerating production of waste for its own perpetuation? Why is that OK?”

Other interesting points include:

“Humans are some of the only animals not attracted to garbage's smells and odors. Modern cities are quite literally built on trash—and trash's role in urban topography can't be overstated.”

Links to articles toward the bottom of the page broaden the discussion to issues such as the “Texas-sized "island" of trash floating in the Pacific Ocean,” the unintended consequences of banning e-waste from public landfills (Case Studies: e-Waste, p326), and innovative approaches to recycling, such as:

“… the BigBelly Solar Compactor, an alternative to traditional trash cans that uses solar power to compact trash.”

The full article, which is an interview with “the anthropologist-in-residence at New York City’s Department of Sanitation (DSNY)” is available at (http://believermag.com/issues/201009/?read=interview_nagle). Did you know the DSNY has an “anthropologist-in-residence”? Did you also know the “DSNY has had an artist-in-residence since 1977”?

Have a good weekend.
David

Bill Werther & David Chandler
Strategic Corporate Social Responsibility: Stakeholders in a Global Environment (2e)
© Sage Publications, 2011
http://www.sagepub.com/strategiccsr2e/

Instructor Teaching Site: http://www.sagepub.com/strategiccsr/
The library of CSR Newsletters are archived at: http://strategiccsr-sage.blogspot.com/

"Every Single Thing You See Is Future Trash. Everything."
September 3, 2010
http://www.good.is/post/every-single-thing-you-see-is-future-trash-everything

Wednesday, October 20, 2010

Strategic CSR - BP vs. Exxon

What should we make of a company like BP, which promoted itself as a CSR standard bearer (and was recognized as such by CSR advocates), but that also failed persistently in relation to its CSR behavior (e.g., its 2005 refinery explosion, the 2006 oil spill in Alaska, and, more recently, the spill in the Gulf of Mexico – not to mention, of course, producing a product that has harmful environmental consequences)?

My initial reaction is to think that the firm’s prior CSR behavior was symbolic; that it was greenwashing its day-to-day operations with marketing spin and had tricked those in the CSR world who search for good news to support. The alternative perspective is to believe that BP was genuine in its approach to CSR and committed the transgressions as a result of carelessness, rather than gross negligence.

Either way, what does this chain of events say about the field’s ability to evaluate CSR? How much better at measuring CSR are we today compared to five or ten years ago? The article in the first url below raises these questions in a way that undermines many of the gains the CSR community was congratulating itself for having made in recent years:

“[BP] is a company with all the CR scouting badges: ISO14001 at major operating sites, an advanced Operating Management System, thorough materiality and risk assessment procedures, comprehensive stakeholder engagement processes, reporting to GRI A+ standard and assurance by Ernst & Young to AA100AS principles of inclusivity, materiality and responsiveness.”

How is it that a firm like Exxon is vilified by the CSR community, while a firm like BP is heralded, merely for pushing all the right buttons? Especially when, in terms of actual negative environmental impact, the article in the second url below indicates that there is a good case to be made that Exxon is a ‘better’ CSR performer than BP:

“Between 1997 and 1998 alone, for example, BP was responsible for 104 oil spills in the Arctic. And in 2008, BP received the largest fine in the history of the U.S. Chemical Safety and Hazard Investigation Board: $87 million for failing to correct safety hazards revealed in the 2005 Texas City explosion. As of June 2010, BP has had 760 such OSHA fines for “egregious, willful” safety violations. Meanwhile, Exxon Mobil has had just one.”

In this sense, BP reminds me of Enron, which was another firm heralded for its CSR and ethics best practice:

“How then is it possible that a much admired company fully implementing best practice can suffer a series of major, even catastrophic incidents? Not in areas outside the main thrust of CR management, … but in the core objectives of protecting people and the planet.”

How far have we really come since Enron? Do we not know what we are talking about? Or, are firms just very good at hiding what is really going on from outside observers? Either way, there are no short term solutions. On the one hand, if we do not know what we are talking about, it is going to take a long time to develop our knowledge to a place where we can effectively evaluate firm operations. Clearly, we are not there yet. On the other hand, if firms are very good at hiding what is really going on, then my sense is that growing communications technology and the free flow of information (Figure 4.4, p102) will eventually get us there, but that is also going to take time. I thought this quote was illuminating:

“One corporate executive told me recently that his company does not certify to ISO14001 because the independent certifiers are less rigorous than their own auditors.”

The article in the third url below continues the debate and Mallen Baker has some excellent comments in response to the second article at: http://www.ethicalcorp.com/content.asp?ContentID=7003 (scroll down to the comments below the article).

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/

BP and the Gulf of Mexico oil spill: Exposing the limits of CSR-lite
BP's recent environment and safety record calls into question whether CR as currently practiced is fit for purpose
Simon Propper
Ethical Corporation Magazine
June 7, 2010
http://www.ethicalcorp.com/content.asp?ContentID=6985

Beyond petroleum: Why the CSR community collaborated in creating the BP oil disaster
The BP Gulf of Mexico disaster shows we have to move from reputation to reality
Natalya Sverjensky
Ethical Corporation Magazine
August 2, 2010
http://www.ethicalcorp.com/content.asp?ContentID=7003

BP and the Gulf of Mexico: Ten lessons for corporate responsibility
Simon Propper considers weaknesses in the CSR industry that should be addressed in light of the BP Deepwater Horizon disaster
Ethical Corporation Magazine
September 1, 2010
http://www.ethicalcorp.com/content.asp?contentid=7045

Monday, October 18, 2010

Strategic CSR - Congress

I would normally steer clear of politics in this Newsletter, but I think the article in the url below (an editorial from today’s NYT) highlights an issue that is too important to ignore:

“With one exception, none of the Republicans running for the Senate -- including the 20 or so with a serious chance of winning -- accept the scientific consensus that humans are largely responsible for global warming. The candidates are not simply rejecting solutions, like putting a price on carbon, though these, too, are demonized. They are re-running the strategy of denial …, repudiating years of peer-reviewed findings about global warming and creating an alternative reality in which climate change is a hoax or conspiracy.”

I find this simply astounding and extremely demoralizing.

What passes for political debate in this country (let alone campaigning standards) long ago passed through the floor of what I would class as a thoughtful exchange of ideas by individuals genuinely concerned with their country’s future, but the anti-intellectual strain that has emerged in the Republican Party over the past decade and dismisses the value of scientific research has real consequences.

In terms of climate change and carbon emissions, this would not matter if the U.S. was a minor player. Unfortunately, however, it is the major transgressor (25% of world carbon emissions by 4% of the world’s population) and the failure of Congress to pass any kind of legislation to control these emissions undermines those who look to this country to lead on this issue (as it does on so many other important issues of our time).

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/

In Climate Denial, Again
561 words
18 October 2010
The New York Times
Late Edition - Final
34
http://www.nytimes.com/2010/10/18/opinion/18mon1.html

Friday, October 15, 2010

Strategic CSR - Social Entrepreneurship

The article in the url below outlines the competition between three nonprofit groups to supply low cost eye glasses to the world’s poor:

“Hundreds of millions of people -- some put the estimates as high as two billion -- do not have the corrective lenses that would allow them to lead better, more productive lives. … Though these adjustable glasses cannot yet help with conditions like astigmatism, at least 80 percent of refractive errors can be fixed.”

The technology developed by the three groups (one in the UK and two in the Netherlands) revolves around self-correcting lenses, which allow the user to adjust the focus themselves, removing the need for a trained technician:

“[The UK design, called Adspecs, http://www.vdw.ox.ac.uk/2minuteintro.htm, allows for] the corrective power of the glasses to be adjusted by means of a clear fluid injected into the lenses. … [The competing] Dutch models are based on a design pioneered in the 1960s by Luis W. Alvarez, an American who won a Nobel Prize in physics. The design uses two lenses that slide across each other to alter their focus.”

Each of the technologies has its pros and cons, and none of the groups is yet in a position to meet its goals of widespread circulation:

“When it comes to choosing sides, many of the charitable groups involved say they are open to whatever glasses do the job. J. Kevin White, a former Marine who runs Global Vision 2020, a foundation that distributes adjustable glasses, said fluid-filled lenses generally offer better optical quality and correct a greater range of refractive error. The Alvarez designs, by contrast, are cheaper, smaller, better-looking and less likely to break.”

Have a good weekend.
David

Bill Werther & David Chandler
Strategic Corporate Social Responsibility: Stakeholders in a Global Environment (2e)
© Sage Publications, 2011
http://www.sagepub.com/strategiccsr2e/

Instructor Teaching Site: http://www.sagepub.com/strategiccsr/
The library of CSR Newsletters are archived at: http://strategiccsr-sage.blogspot.com/

Better Vision For the World, On a Budget
By DOUGLAS HEINGARTNER
1312 words
2 January 2010
The New York Times
Late Edition - Final
1
http://www.nytimes.com/2010/01/02/business/global/02glasses.html

Wednesday, October 13, 2010

Strategic CSR - MBA Oath

I have been thinking on and off about the value of the MBA Oath (http://mbaoath.org/).

The Oath, introduced by Harvard students in 2009, seeks to alter the broad perception of the MBA graduate by focusing students on the importance of adding social value, over and above personal gain:

“Our mission is to facilitate a widespread movement of MBAs who aim to lead in the interests of the greater good and who have committed to living out the principles articulated in the oath.

We hope the Oath will: a) make a difference in the lives of MBAs who take the oath b) challenge other MBAs to work with a higher professional standard, whether they sign the oath or not and c) create a public conversation in the press about professionalizing and improving management.

Our long-term goal is to transform the field of management into a true profession, one in which MBAs are respected for their integrity, professionalism, and leadership.”

The article in the url below notes that, since 2009, the Oath has spread well beyond Harvard and is known to a growing number of students:

“A year on, the oath has more than 4,000 signatories from 300 business schools around the world.”

The article also questions the value of the Oath, arguing that there is a self-selection bias in those who sign:

“Those who don't care won't sign.”

In general, however, it would be interesting to hear some stories of how the Oath has helped employees work through an ethical dilemma they faced in an organization. I wonder to what extent signing the Oath has changed anyone’s behavior. My sense is that people sign oaths in the way they answer survey questions and commit to New Year’s resolutions—with the best of intentions. The resulting data, however, is not necessarily a reliable reflection of actual intentions or behavior.

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/

Should MBA students do the perp walk?
By Michael Skapinker
813 words
21 September 2010
Financial Times
Asia Ed1
13
http://www.ft.com/cms/s/0/65221ffe-c4e6-11df-9134-00144feab49a.html

Monday, October 11, 2010

Strategic CSR - Intel

The article from socialfunds.com in the url below indicates how the recent SEC announcement of a “standard that requires public companies to weigh the impact of climate-change laws and regulations when deciding which information to disclose in corporate filings” (CSR Newsletter, February 8, 2010, re-produced below) may play out in practice. In April, following “a shareowner resolution requesting the creation of a Board Committee on Sustainability,” Intel agreed:

“… to change its corporate charter by requiring the Governance and Nominating Committee to report to the Board "with regards to matters of corporate responsibility and sustainability performance, including potential long and short term trends and impacts to our business of environmental, social and governance issues, including the company's public reporting on these topics."”

In addition:

“Intel directed its outside legal counsel to "write a legal opinion specifically stating that pursuant to Delaware law, corporate responsibility and sustainability reporting based upon the committee's charter, was part of the fiduciary duty of company directors."”

Of course, the value of these decisions will be determined by the firm’s actions. But, the decisions alone, together with this year’s SEC announcement, seem to mark an important, positive sea-change in the CSR debate.

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/

Intel Agrees to Board-Level Consideration of Sustainability
by Robert Kropp
Social Funds
April 05, 2010
http://www.socialfunds.com/news/article.cgi/article2921.html

From: David Chandler {msbbe096}
Sent: Monday, February 08, 2010 9:56 AM
Subject: Strategic CSR - SEC

Over the weekend, I was reading the BusinessWeek article in the url below about socially responsible investing (Issues: Investing, p184). The article was interesting, but what really caught my eye was this paragraph:

“On Jan. 27 the U.S. Securities & Exchange Commission approved a standard that requires public companies to weigh the impact of climate-change laws and regulations when deciding which information to disclose in corporate filings. The SEC said companies should also consider international accords, indirect effects such as reduced demand for goods tied to greenhouse gas production, and physical impacts such as the potential for increased insurance claims in coastal regions due to rising sea levels in their assessments.”

This seems to be a pretty big deal to me. Yet, I read multiple newspapers a day and I haven’t seen any articles about this announcement. Did I miss it? If the SEC really is requiring publicly-traded firms to “weigh the impact of climate-change laws and regulations when deciding which information to disclose in corporate filings,” that has the potential to alter significantly both the degree and kind of information firms release. As such, I would think it has ramifications similar to those sought by the movement to require executives to consider stakeholders beyond their shareholders in making decisions (e.g., see http://www.c4cr.org/).

Did anyone catch this when it was announced and do you have any thoughts on whether this is potentially as important as I think it is?

Take care
David

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

Social Investing Gathers Momentum
Niche no more: Socially responsible funds are putting up impressive performance numbers—and their reach is spreading
By David Bogoslaw
February 3, 2010
http://www.businessweek.com/investor/content/feb2010/pi2010023_247094.htm

Friday, October 8, 2010

Strategic CSR - Solar Power Quiz

This “Solar-power IQ” quiz was part of a special report on energy that appeared in the WSJ in May. The test was fun and enlightening, so I thought it worth passing on. Some of the best questions are copied here, while the whole test (with the answers) is available in the article in the url below:

1. Which of these locations gets the most electricity from solar power?

A. Arizona
B. Denmark
C. Germany
D. Spain
E. New Jersey

5. Which country or region leads in manufacturing solar panels?

A. China
B. Europe
C. Japan
D. North America

6. In the U.S., solar power is most commonly used to do what?

A. Provide electricity in the home
B. Power large retail centers
C. Deliver electricity to the grid
D. Heat water for swimming pools
E. Heat water for household use

7. What is the approximate cost to produce electricity from solar power in the U.S.?

A. Five cents per kilowatt-hour
B. 10 cents per kilowatt-hour
C. 25 cents per kilowatt-hour
D. 35 cents per kilowatt-hour

Have a good weekend.
David

Bill Werther & David Chandler
Strategic Corporate Social Responsibility: Stakeholders in a Global Environment (2e)
© Sage Publications, 2011
http://www.sagepub.com/strategiccsr2e/

Instructor Teaching Site: http://www.sagepub.com/strategiccsr/
The library of CSR Newsletters are archived at: http://strategiccsr-sage.blogspot.com/

Energy (A Special Report)
Test Your Solar-Power IQ: Everybody's talking about solar power; But do you know what they're talking about?
By Yuliya Chernova
684 words
10 May 2010
The Wall Street Journal
R2
http://online.wsj.com/article/SB10001424052702303491304575187902747616386.html

Wednesday, October 6, 2010

Strategic CSR - CSR and Business Schools

I thought the article in the url below from Monday’s FT would be of interest because it relates to what all of you do—teach CSR/sustainability in business schools.

In the article, David Grayson argues that, although CEOs and other executives recognize the importance of incorporating sustainability into their firms’ strategies and day-to-day operations, business schools are not doing a very good job of equipping their students to meet these expectations on graduation:

“There are more than 10,000 business schools worldwide. Just 326 have signed up for the UN Principles of Responsible Management Education. Only 60 schools are members of the Academy for Business in Society and 40 are in the Global Responsible Leadership Initiative. Just 149 schools entered the last Aspen Institute's Beyond Grey Pinstripes biennial rankings.”

This argument seems counter-intuitive to me, mainly for two reasons:

First, my sense is that CSR/sustainability courses in business schools are growing rapidly and business school professors are both aware of the importance of delivering these issues in the classroom and being proactive in responding to growing student interest in these areas.

Second, I think Grayson gives executives a bit of a free pass. He cites a UN Global Compact study that reports survey data of 93% of CEOs who believe sustainability is critical to their firms’ operations and 96% of them who think sustainability needs to be fully integrated into strategic planning. Apart from the fact that I have always considered such survey data to be suspect (due to the high likelihood of social desirability bias), there is no attempt by Grayson to place these extremely high numbers in context by comparing them with what CEOs are actually doing to bring about the change they say is necessary. He makes some good suggestions for how communication between firms and business schools can be improved, but ultimately argues that the burden of responsibility lies with the schools, rather than the executives who have the power to actually alter the way firms operate:

“Taking sustainability more seriously has to rest with deans and schools' executives. If they do not take this on board, other organisations will fill the void for teaching sustainability skills.”

Grayson is Director of the Doughty Centre for Corporate Responsibility at Cranfield School in the UK (http://www.som.cranfield.ac.uk/som/p1080/Research/Research-Centres/Doughty-Centre-for-Corporate-Responsibility). From this and his other pioneering work, I know that he is doing more than his fair share to raise the profile of CSR/sustainability issues both in the classroom and directly with corporations. I am not so pessimistic on the rest of the work being done by colleagues in this area, however, and am certainly less than confident that the very CEOs Grayson cites (and the incentive structures/cultures they establish in their firms) are not one of the largest barriers to progress.

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/

Schools are blind to the sustainability revolution
By David Grayson
627 words
4 October 2010
Financial Times
USA Ed1
15
http://www.ft.com/cms/s/2/63cf95b0-cd5f-11df-ab20-00144feab49a.html

Monday, October 4, 2010

Strategic CSR - Denmark

The article in the url below is interesting for two reasons. First, because it demonstrates the huge technological advances that have been made in processing the stuff humans through away in ways that protect the environment and conserve resources:

“Far cleaner than conventional incinerators, this new type of plant converts local trash into heat and electricity. Dozens of filters catch pollutants, from mercury to dioxin, that would have emerged from its smokestack only a decade ago. … The plants run so cleanly that many times more dioxin is now released from home fireplaces and backyard barbecues than from incineration. With all these innovations, Denmark now regards garbage as a clean alternative fuel rather than a smelly, unsightly problem.”

A second and more startling point of interest is the comparison between Denmark and the U.S. in terms of applying this technical knowledge. While Denmark has 29 of these “waste-to-energy plants” in operation, “serving 98 municipalities in a country of 5.5 million people, and 10 more are planned or under construction”:

“By contrast, no new waste-to-energy plants are being planned or built in the United States … . There are only 87 trash-burning power plants in the United States, a country of more than 300 million people, and almost all were built at least 15 years ago.”

The consequences of these different approaches are most apparent in this graphic that accompanies the article:

http://www.nytimes.com/imagepages/2010/04/13/science/earth/13trash.html

Friday, October 1, 2010

Strategic CSR - LED Lights

Chalk this one up under the category of unintended consequences of greater pressures for environmental sustainability.

The article in the url below is a report about the shift from stoplights made using old light bulbs to new stoplights that are produced using LED lights. The LED lights last longer, require less maintenance, are easier for motorists to see, and, important for environmentalists, use less energy than their predecessors. As a result:

“In the last seven years, Wisconsin has converted more than 90 percent of the lighting under state control to LED bulbs.”

A side-effect of the new lights, however, is that they emit less heat, which is a direct result of consuming less energy. In the summer, this is fine. In the winter, however, less heat leads to the additional build-up of snow and ice on the lights, which obscures the lights and can have deadly consequences:

“Last April, the driver of a pickup truck approaching an intersection in the far western suburb of Oswego went past a red light obscured by snow and struck a 34-year-old woman turning left in her car. The woman died and four other people were injured in the accident.”

The police are attributing the accident to the new lights:

''Do I think the accident would have happened if the light was not covered in snow?'' said Detective Rob Sherwood of the Oswego Police Department, referring to the accident in April. ''I'd be willing to bet that it would not have happened if the driver that went through the light had an unobstructed view of the signal. It was the first indication in this community that the LED lights were not melting the snow.''

Have a good weekend.
David

Bill Werther & David Chandler
Strategic Corporate Social Responsibility: Stakeholders in a Global Environment (2e)
© Sage Publications, 2011
http://www.sagepub.com/strategiccsr2e/

Instructor Teaching Site: http://www.sagepub.com/strategiccsr/
The library of CSR Newsletters are archived at: http://strategiccsr-sage.blogspot.com/

LED Signals Seen as Potential Hazard
By SUSAN SAULNY
688 words
2 January 2010
The New York Times
Late Edition - Final
12
http://www.nytimes.com/2010/01/02/us/02lights.html

Wednesday, September 29, 2010

Strategic CSR - Caterpillar

Sometimes, it is hard to understand how risk assessment/risk management decisions are made inside firms. The article in the url below, for example, announces Caterpillar’s decision to halt trading with Iran via its non-U.S. subsidiaries:

“Caterpillar, the construction equipment group, has become the latest US company to bow to a "name and shame" campaign by influential lobbyists by announcing steps to sever trading links with Iran.”

This means that, until this March, Caterpillar was deliberately trading with Iran, in spite of the well-known nature of the regime and its difficult relations with the international community. Did Caterpillar’s executives think no-one would notice? Alternatively, did they think the firm’s stakeholders would not mind or have sympathy for the firm’s need to maximize profits? It is difficult to imagine the thought processes inside Caterpillar’s executives’ minds that recognize the controversy surrounding Iran, acknowledge U.S. law that makes it illegal to trade directly with Iran, but conclude that the firm is going to go ahead and circumvent the spirit of the law anyway:

“As part of the Caterpillar campaign, the pressure group this month erected a roadside billboard near the company's Peoria, Illinois, headquarters that pictured one of the company's diggers alongside Mahmoud Ahmadi-Nejad, Iranian president, and the slogan: "Today's work, tomorrow's nuclear Iran.”

Clearly, Caterpillar is not alone in evaluating this risk in the same way and concluding that the potential profits outweigh any risks to business:

“As western pressure mounts at the United Nations for a new round of global sanctions against Tehran over its nuclear programme, UANI and other lobbyists have targeted 200 US and non-US companies whose business with Iran is legal under US and international law.”

Monday, September 27, 2010

Strategic CSR - Microfinance

The article in the url below suggests the dangers of success for the microfinance business model (Issues: Microfinance, p245):

“SKS Microfinance, India's largest lender to the poor, aims to raise about $350m this month by selling a 21.6 per cent stake in an initial public offering expected to spark a wave of listings by equity-strapped Indian microfinance companies.”

While the high rates of repayment and community structure present a real opportunity for microfinance institutions to be profitable (or at least self-sustaining), the profit-maximization pressures (higher interest rates and lower loan qualification standards) that accompany a public listing carry the potential to undermine the social-entrepreneurship microfinance goals (Issues: Social Entrepreneurship, p189):

“Muhammad Yunus, the Nobel Peace Prize-winning founder of Bangladesh's Grameen Bank - the world's most famous microlender - has criticised the commercialisation of the industry, saying profit-oriented microlenders are little different to the loan sharks they once set out to replace.”

The possibility for corruption quickly arises as the pursuit of profit spreads across the sub-units of the organization:

“SKS, which says it has 7m borrowers in 19 Indian States, also plans to boost its revenues through alliances with large companies to distribute their products - such as mobile phones and water purifiers - even as it provides rural consumers with the microloans needed to buy the items.”

The article in the second url below shows the success and rapid growth of microfinance organizations, such as SKS, in India:

“For the last three years, outstanding loan portfolios of Indian micro-finance institutions have grown by 65 per cent annually, according to the World Bank, with total loans of about $2.5bn to about 22.6m households.”

As well as reinforcing the threats:

“Typical loans average between $200 and $250, and carry rates of about 28 per cent - lower than money-lenders, albeit still expensive when compared with commercial bank rates.”

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/

SKS Microfinance plans to raise $350m in IPO
By James Fontanella-Khan in Mumbai and Amy Kazmin in New Delhi
418 words
21 July 2010
Financial Times
Asia Ed1
17
http://www.ft.com/cms/s/0/1879f6e4-9422-11df-a3fe-00144feab49a.html

New networks help ease debt dilemma
Kazmin, Amy
603 words
21 July 2010
Financial Times
Asia Ed1
17
http://presscuttings.ft.com/presscuttings/s/3/viewPdf/37730595

Friday, September 24, 2010

Strategic CSR - Recycling

The graphic in the url below is of a yacht constructed solely from recycled plastic:

“The Plastiki, a boat built from recycled plastic, is expected to begin a 100-day crossing of the Pacific Ocean in March to test the seaworthiness of new materials and draw attention to ocean-borne plastic waste.”

As well as raising awareness of the importance of recycling and not polluting the oceans, the yacht also represents the scientific innovation that can be applied to solving some of the most intractable problems we face:

“The Plastiki can travel up to 200 miles a day, depending on wind, and will pass through and take samples of a massive floating garbage patch in the eastern part of the North Pacific Gyre.”

In July, the Plastiki completed her trip across the Pacific Ocean from San Francisco to Sydney (http://www.msnbc.msn.com/id/38412525/).

Have a good weekend
David

Bill Werther & David Chandler
Strategic Corporate Social Responsibility: Stakeholders in a Global Environment (2e)
© Sage Publications, 2011
http://www.sagepub.com/strategiccsr2e/

Instructor Teaching Site: http://www.sagepub.com/strategiccsr/
The library of CSR Newsletters are archived at: http://strategiccsr-sage.blogspot.com/

A Boat From Bottles
23 February 2010
The New York Times
Late Edition - Final
D3
http://www.nytimes.com/imagepages/2010/02/23/science/23sciillo_graphic.html

Wednesday, September 22, 2010

Strategic CSR - China

There is growing evidence that the negative impact on climate change of China’s economic and social development is increasing, that China’s government recognizes this threat, and that it is acting to do something about it.

The article in the first url below was written by Gordon Conway, co-Chair of the China Council for International Co-operation on Environment and Development (the other co-Chair is China’s vice-premier, Li Keqiang), and outlines China’s economic response to the ecological changes it is experiencing. The economic plan is to be included in the country’s twelfth five-year plan (2011-2015):

“The Chinese leaders are moved by a sense of urgency. Following the traditional economic model is not an option: resource, social and environmental constraints make it impossible. They are also aware of the danger that rapid growth will lock China into industrial and urban structures that will become a liability in a low-carbon world.”

The plan maps out possible responses to three different scenarios of high, low, and “enhanced low-carbon” emission levels. The reported goals are ambitious and extend beyond anything China is willing to commit to publicly:

“In each scenario China would continue its economic growth. … The Chinese plan is to reduce energy consumption per unit of GDP by 75-85 per cent by 2050. It will be achieved through industrial restructuring and efficiency gains in every economic sector, including new low-carbon cities that avoid suburban sprawl and prioritise public transport. This will be complemented by much higher efficiency in fossil fuel use, a shift to renewable energy and the use of carbon capture and storage (CCS). … During the 12th five-year plan, energy-saving measures and new energy sources could reduce carbon emissions per unit of gross domestic product by 20-23 per cent or possibly more.”

Interestingly:

“Lord Stern, the climate economist, attended the September 2009 meeting of the task force in Beijing. He believed the report was the most careful, thorough analysis by any country.”

The article in the second url below provides examples of how China is fast becoming a world leader in renewable energy technology, such as carbon sequestration, clean-burning coal, and wind and solar energies. This position is supported by Tom Friedman’s long-standing campaign in the NYT to promote action in the U.S. on this issue so that it does not fall further behind China’s developing capabilities (e.g., http://www.nytimes.com/2010/09/19/opinion/19friedman.html):

“There is really no debate about climate change in China,” said Peggy Liu, chairwoman of the Joint U.S.-China Collaboration on Clean Energy, a nonprofit group working to accelerate the greening of China. “China’s leaders are mostly engineers and scientists, so they don’t waste time questioning scientific data.”

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/

Beijing seeks a head start in the race to go green
Gordon Conway
753 words
12 November 2009
Financial Times
Asia Ed1
11
http://www.ft.com/cms/s/0/adb09036-cef9-11de-8a4b-00144feabdc0.html
or
http://www.china-embassy.org/eng/xw/t649414.htm

Copenhagen Summit: China takes lead in green technology --- World's top polluter combines cheap labor, capital in ambitious renewable-energy plan that could reshape business
By Shai Oster
1946 words
18 December 2009
The Wall Street Journal
6
http://online.wsj.com/article/SB126082776435591089.html

Monday, September 20, 2010

Strategic CSR - Conflict Minerals

The article from Newsweek in the url below is interesting because it describes a growing pressure on technology firms to be held accountable for the raw materials they use to produce many of the communication products on which we rely (see also Issues: e-waste, p326):

“It takes a lot to snap people out of apathy about Africa’s problems. But in the wake of Live Aid and Save Darfur, a new cause stands on the cusp of going mainstream. It’s the push to make major electronics companies (manufacturers of cell phones, laptops, portable music players, and cameras) disclose whether they use “conflict minerals”—the rare metals that finance civil wars and militia atrocities, most notably in Congo.”

What I found most interesting about the story, however, was a throwaway line heralding the topical nature of the campaign:

“… new rules requiring American-listed companies to improve their supply-chain transparency are folded into the financial-reform bill that passed Congress this week.”

A little searching on the web led me to this industry association blog entry (http://blog.ipc.org/2010/06/28/1061/ on the IPC website, which carries the tag line: Association Connecting Electronics Industries) complaining about the “heavy-handed legislation.” I thought the blog’s summary of the requirements in the legislation (plus comments) was worth quoting at length:

“Once passed by the Senate and House and signed by the president, the legislation will require companies whose manufactured goods contain tin, tantalum, tungsten, or gold to:

• Report annually to the SEC (Securities and Exchange Commission) if the minerals did originate from the Congo or adjoining countries. It is unclear what the obligation will be for companies who cannot determine from where the minerals originated.

• Submit a due diligence plan with the company’s annual SEC report that includes:

a. A description of the measures taken by the company to prevent sourcing from the Congo;

b. A description of the products manufactured or contracted to be manufactured that are not conflict free, the facilities used to process the conflict minerals, the country of origin of the conflict minerals, and the efforts to determine the mine or location of origin;

c. An independent third party audit of the company’s due diligence plan; and

d. A certification by the company of its due diligence report (there is no definition of “certify” included in the language so that obligation is vague).”

While claiming that:

“For the past several years, industry groups, including Electronics Industry Citizenship Coalition (EICC), the Global eSustainability Initiative (GeSI), the International Tin Research Institute (ITRI) Tin Supply Chain Initiative (iTSCi) and the IPC Solder Product Value Council (SPVC), have been working to provide transparency and accountability concerning the supply of raw materials coming from the conflict zones of the Democratic Republic of Congo (DRC).”

the blog entry predicts the new legislation will likely result in:

“… total industry divestment from the DRC and adjacent countries — removing an important legitimate source of income in the resource-poor region in addition to clamping down on illegitimate mines.”

Although the IPC clearly has an interest in this issue, because it represents firms in the electronics industry, they post more information about conflict minerals in consumer electronics goods at: http://www.ipc.org/minerals

There is also more information available from the NYT (http://www.nytimes.com/2010/06/27/opinion/27kristof.html) and a quick Google search for ["conflict minerals" Dodd-Frank] produces a great deal more information.

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/

The Genocide Behind Your Smart Phone
Our biggest gadget makers—including HP and Apple—may inadvertently get their raw ingredients from murderous Congolese militias. A new movement wants them to trace rare metals from ‘conflict mines.’
By Alan Mascarenhas
NEWSWEEK
Published July 16, 2010
http://www.newsweek.com/2010/07/16/the-genocide-behind-your-smart-phone.html