The CSR Newsletters are a freely-available resource generated as a dynamic complement to the textbook, Strategic Corporate Social Responsibility: Sustainable Value Creation.

To sign-up to receive the CSR Newsletters regularly during the fall and spring academic semesters, e-mail author David Chandler at david.chandler@ucdenver.edu


Wednesday, August 24, 2016

Strategic CSR - Welcome back!

 
Welcome back to the Strategic CSR Newsletter!
The first CSR Newsletter of the Fall semester is below.
As always, your comments and ideas are welcome.
 
 
The Newsletters this semester begin with the article in the url below, which contains a stunning number that emerged over the summer:
 
"BP PLC said its costs from the deadly 2010 Gulf of Mexico oil spill would rise by an additional $5.2 billion and ultimately cost $61.6 billion to put one of the worst environmental disasters in U.S. history behind it."
 
Acting according to the expectations of stakeholders is a surprisingly difficult message to convey to large corporations. But, if there is ever a compelling argument to focus on building an ethical organizational culture that encourages investment in the short-term in order to create broad-based value over the medium to long-term, BP would seem to be it:
 
"The British oil giant said on Thursday the pretax charge for its second quarter likely would be the last from the Deepwater Horizon accident to have a 'material impact' on its financial performance, signaling an end to six years of mounting costs that humbled one of the world's largest energy companies."
 
To put this number of $61.6 billion into some kind of context:
 
"BP's costs are much larger than the fines levied on individual banks involved in the subprime mortgage crisis last decade or the 1989 Exxon-Valdez spill, which cost the U.S. company $4.3 billion."
 
The graphic accompanying the article (https://si.wsj.net/public/resources/images/BT-AJ867_BP_16U_20160714181507.jpg) compares BP's penalty to those of other firms that caused environmental disasters in the US. While these fines are not inflation-adjusted, the contrast remains striking:
 
- Three Mile Island (1979): $1 billion
- Hudson River PCB contamination (1970s): $1.6 billion
- Exxon-Valdez oil spill (1989): $4.3 billion
- Deepwater Horizon oil spill (2010): $61.6 billion
 
Hope you all have a good semester.
David
 
David Chandler & Bill Werther
 
Instructor Teaching and Student Study Site: http://www.sagepub.com/chandler3e/
Strategic CSR Simulation: http://www.strategiccsrsim.com/
The library of CSR Newsletters are archived at: http://strategiccsr-sage.blogspot.com/


BP's Gulf-spill Tab Hits $62 Billion
By Michael Amon and Tapan Panchal
July 15, 2016
The Wall Street Journal
Late Edition – Final
B3
 

Friday, June 24, 2016

Strategic CSR - 4e

I hope your summer is going well.
 
This Newsletter is just to let you know that the fourth edition of Strategic Corporate Social Responsibility: Sustainable Value Creation is now published. Review copies are available on the book's website:
 
 
In addition to all the new and updated content, Sage and I worked hard to improve the instructor resources that accompany this edition. These support resources are available online (https://study.sagepub.com/chandler4e) and include materials for both instructors (password protected) and students:
 
Instructors
Answers to in-text questions
PowerPoint slides
Test bank (very comprehensive – a big thank you to John Tichenor for his help with this)
Lecture notes (including suggested answers to end of chapter discussion questions and Strategic CSR debate motions)
Sample syllabi
Issues and case studies from the third edition
Film/video resources
 
Students
eFlashcards
Discussion questions
Film/video resources
Blog archive of the CSR Newsletter (http://strategiccsr-sage.blogspot.com/)
 
Of course, if you have any questions about the 4e, please feel free to contact me at any time.
Take care
David
 
 
Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler4e
Strategic CSR Simulation: http://www.strategiccsrsim.com/
The library of CSR Newsletters are archived at: https://strategiccsr-sage.blogspot.com/
 

Wednesday, May 4, 2016

Strategic CSR - South Park

 
This is the last CSR Newsletter of the Spring semester.
Have a great summer and I will see you in August!
 
 
The video in the url below is an old episode of the cartoon South Park that addresses the dominance of Walmart:
 
 
For all its crude humor, the show makes an insightful point about the underlying nature of Walmart. The firm is not an independent entity that acts and thinks (as it is so often portrayed by the CSR community); it is a reflection of the society in which it operates (a reflection of its collective set of stakeholders). This is why, in the cartoon, the "heart of Walmart" is a mirror. To put this another way, it is not Walmart that "puts Mom and Pop stores out of business," but society that does that. If Walmart's stakeholders (consumers, employees, local governments, etc.) did not see value in what Walmart does, the store would not exist. The fact that it does exist and is as successful as it is (90% of U.S. households shop there at least once a year) therefore says more about the values that are dominant in society today than almost any other business. It is a 'truth' that many CSR advocates appear reluctant to recognize. If we want Walmart to go away, we need to stop supporting it. If we want the big-box store to remain as a successful and dominant business reality (in whatever form it takes, Walmart, Target, K-Mart, Aldi, Primark, etc.), we need to keep doing exactly what we are currently doing.
 
Have a great summer.
David
 
 
Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler4e
Strategic CSR Simulation: http://www.strategiccsrsim.com/
The library of CSR Newsletters are archived at: http://strategiccsr-sage.blogspot.com/
 

Monday, May 2, 2016

Strategic CSR - Ideological bias

The article in the url below explores an interesting question:
 
"Are liberals impairing our ability to combat climate change?"
 
The premise for the question is that everyone has biases, we are just selective in favoring those sources of information that match our particular biases. In other words, we support something when it complements our view of the world and find ways to undermine it when it challenges that view. For example, the widespread belief today (particularly among the left) is that conservatives pose the largest impediment to progress on climate change because they are 'anti-science.' This article suggests that, contrary to this view, there is anti-science bias all along the political spectrum:
 
"… even as progressive environmentalists wring their hands at the G.O.P.'s climate change denial, there are biases on the left that stray just as far from the scientific consensus. 'The left is turning anti-science,' Marc Andreessen, the creator of Netscape who as a venture capitalist has become one of the most prominent thinkers of Silicon Valley, told me not long ago. He was reflecting broadly about science and technology. His concerns ranged from liberals' fear of genetically modified organisms to their mistrust of technology's displacement of workers in some industries."
 
Further, the article suggests that it is in relation to the environment that liberal bias is particularly damaging:
 
"For starters, [liberals] stand against the only technology with an established track record of generating electricity at scale while emitting virtually no greenhouse gases: nuclear power. Only 35 percent of Democrats, compared with 60 percent of Republicans, favor building more nuclear power plants, according to a poll by the Pew Research Center. It is the G.O.P. that is closer to the scientific consensus. According to a separate Pew poll of members of the American Association for the Advancement of Science, 65 percent of scientists want more nuclear power too."
 
To put it more bluntly in relation to the current U.S. presidential campaign:
 
"Ted Cruz's argument that climate change is a hoax to justify a government takeover of the world is absurd. But Bernie Sanders's argument that 'toxic waste byproducts of nuclear plants are not worth the risks of the technology's benefit' might also be damaging."
 
And it is not difficult to demonstrate the extent to which people are selective in their appreciation of science. In short, it is not that people are ignorant or unexposed to scientific discoveries, but that they simply refuse to believe them because they conflict with their larger ideological perspective:
 
"People on the right tend to like private businesses, which they see as productive job creators. They mistrust government. It's not surprising they will play down climate change when it seems to imply a package of policies that curb the actions of the former and give a bigger role to the latter. On the left, by contrast, people tend to mistrust corporations — especially big ones — as corrupt and destructive. These are the institutions bringing us both nuclear power and genetically modified agriculture."
 
Take care
David
 
 
Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler4e
Strategic CSR Simulation: http://www.strategiccsrsim.com/
The library of CSR Newsletters are archived at: http://strategiccsr-sage.blogspot.com/
 
 
Climate Change Bias, But on Both Sides
By Eduardo Porter
April 20, 2016
The New York Times
Late Edition – Final
B1
 

Wednesday, April 27, 2016

Strategic CSR - 4e

I am happy to announce that the fourth edition of Strategic CSR will be published over the summer. The title for this edition is Strategic Corporate Social Responsibility: Sustainable Value Creation:
 
 
The new sub-title reflects the book's consolidation around the idea that is central to CSR – long-term value creation for the firm's broad range of stakeholders. Talking about CSR in this way (i.e., value creation) moves it from the periphery of the firm's activities, to strategic planning and core operations (and therefore the basis for everything the CEO and senior executives do, every day).
 
Apart from the usual updates, new Tables and Figures, and other new ideas, the major change in the 4e is to the book's structure. In particular, there are now five Parts, each consisting of three chapters and one case-study (see the abbreviated ToC pasted below). While the core of many of these chapters was drawn from material in the 3e, there are new sections in each chapter; there are also completely new chapters. As such, to ease the transition from the 3e to the 4e, I have prepared a Transition Guide as part of the instructor resources that summarizes each of the chapters and explains where they came from.
 
This change in structure was made primarily in response to demand from instructors to adapt the book for easier assignment over the long Fall/Spring semester. Thus, a larger number of shorter chapters was preferred to a smaller number of longer chapters. Overall, the 4e is considerably shorter than the 3e.
 
Thank you to those of you who were kind enough to review the 4e plan last year. Many of those suggestions are also included – I hope you all like the result.
 
Although the 4e will not be available until the summer (probably late June/early July), Sage is now accepting requests for review copies at the book's new website:
 
 
Of course if you have any questions, please feel free to contact me at any time. Thank you, as always, for your support.
Take care
David
 
 
Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler4e
Strategic CSR Simulation: http://www.strategiccsrsim.com/
The library of CSR Newsletters are archived at: http://strategiccsr-sage.blogspot.com/
 
 
Strategic Corporate Social Responsibility: Sustainable Value Creation (4e) – Table of Contents
 
Part I – Corporate Social Responsibility
 
Chapter 1:  What is CSR?
Chapter 2:  The Driving Forces of CSR
Chapter 3:  Corporate Rights and Responsibilities
Case Study:  Religion
 
Part II – A Stakeholder Perspective
 
Chapter 4:  Stakeholder Theory
Chapter 5:  Corporate Stakeholder Responsibility
Chapter 6:  Who Owns The Corporation?
Case Study:  Impact Investing
 
Part III – An Economic Perspective
 
Chapter 7:  The Pursuit of Profit
Chapter 8:  Incentives and Compliance
Chapter 9:  Accountability
Case Study:  Financial Crisis
 
Part IV – A Strategic Perspective
 
Chapter 10:  Strategy + CSR
Chapter 11:  CSR as a Strategic Filter
Chapter 12:  Strategic CSR
Case Study:  Supply Chain
 
Part V – A Sustainable Perspective
 
Chapter 13:  Sustainability
Chapter 14:  Implementing CSR
Chapter 15:  Sustainable Value Creation
Case Study:  Employees
 

Monday, April 25, 2016

Strategic CSR - Pro-forma earnings

The article in the url below is interesting because it demonstrates the extent to which corporations are increasingly seeking to manipulate investor perceptions by massaging their accounting:
 
"Over the past year there has been a large, and growing, divergence between the pro forma earnings—those excluding items such as restructuring charges accounting rules require them to include—that companies emphasize and their results under generally accepted accounting practices, or GAAP. In the fourth quarter, pro forma earnings for companies in the S&P 500 were 59% above GAAP, according to figures from FactSet and S&P Dow Jones Indices."
 
The chart accompanying the article illustrates the recent divergence between what companies have to report to the SEC and the picture they would like investors to see:
 
 
Whether a charge or other cost is directly related to a company's underlying performance, of course, does not change the fact that the firm has to pay it. As such, it diminishes profits. And while investors can ignore it if it truly is a one-off event, the problem comes when these charges that firms would like investors to ignore are happening frequently:
 
"In the fourth quarter, pro forma earnings were 29% higher than the S&P operating figures, the biggest absolute difference since the fourth quarter of 2008. And while the ailing energy sector was a big contributor to that, it wasn't the only place where pro forma was being used more aggressively. Indeed, excluding energy, the gap between the pro forma and operating figures was 14%, which also represented a post-financial crisis high. The bad stuff is getting harder to ignore."
 
If there is a 'one-off' charge in most earnings statements, then those charges are no longer properly thought of as 'one-off.'
 
Take care
David
 
David Chandler & Bill Werther
 
Instructor Teaching and Student Study Site: http://www.sagepub.com/chandler3e/
Strategic CSR Simulation: http://www.strategiccsrsim.com/
The library of CSR Newsletters are archived at: http://strategiccsr-sage.blogspot.com/
 
 
Investors Should Pay Attention to What Companies Ask Them to Ignore
By Justin Lahart
April 1, 2016
The Wall Street Journal
Late Edition – Final
C12
 

Friday, April 22, 2016

Strategic CSR - Earth Day

The article in the url below presents an interesting take on our symbiotic relationship with our environment, in its broadest sense:
 
"The lead in the water in Flint, Mich., is a devastating reminder of how closely human health is intertwined with the environment. While the Flint crisis may be an egregious example of cruelty and neglect, the damaging consequences of a broken environment are all around us, a new tally by the World Health Organization shows."
 
Specifically, the article focuses on the number of deaths caused by the dangers present in our environment, almost all of which are the result of human activity:
 
"Nearly a quarter of all deaths worldwide are caused by environmental risks like polluted air, dirty water, hazardous workplaces, and dangerous roads, according to the WHO report. The global health authority estimates that 12.6 million deaths in 2012, or about 23 percent of the total, were attributable to such factors."
 
However approximate this total is, what is equally fascinating are the categories of deaths that are not included in these numbers:
 
"The WHO report—which doesn't count risks that depend on individual behavior, such as smoking and diet—looks at the environment broadly, including 'physical, chemical, and biological factors external to a person' that can be modified. It focuses on environmental risks that are the product of the societal decisions that shape the world we live in."
 
What is also interesting is how the main causes of death have shifted over time:
 
"More people around the globe have gotten access to clean water, sanitation, and less harmful household cooking fuels. That transition has led to a decline in infectious diseases. At the same time, non-communicable diseases like heart disease and cancer account for a growing share of death and illness worldwide."
 
The underlying message is that all these causes are preventable. We build the environment in which we all live. As such we can change it, if we want to.
 
Happy Earth Day!
David
 
David Chandler & Bill Werther
 
Instructor Teaching and Student Study Site: http://www.sagepub.com/chandler3e/
Strategic CSR Simulation: http://www.strategiccsrsim.com/
The library of CSR Newsletters are archived at: http://strategiccsr-sage.blogspot.com/
 
 
Our Broken Environment Kills a Quarter of Us
By John Tozzi
March 14, 2016
Bloomberg Businessweek

Wednesday, April 20, 2016

Strategic CSR - Risk

The article in the url suggests that financial regulators are ahead of politicians in preparing for the environmental changes that are coming:
 
"Regulators around the globe are researching potential risks to financial stability from a failure to contain climate change or a sudden collapse in the value of fossil-fuel assets. Institutions such as the Bank of England, the Financial Stability Board and the European Systemic Risk Board are examining how banks, insurers and pension funds would cope if policies designed to reduce carbon-dioxide emissions led to a sharp drop in the share price of oil, gas and coal companies."
 
As a result, investors need to understand that companies directly involved in the extraction business will find their license to operate increasingly constrained:
 
"They are looking at new rules to disclose exposures to both stocks and bonds in such companies, conducting stress tests based on different climate scenarios or even requiring additional capital buffers."
 
The concern among regulators is that, if investors suddenly wake up to the potential danger after ignoring it for so long, there could be significant economic dislocation as the financial world adapts to a new reality:
 
"'A wholesale reassessment of prospects, especially if it were to occur suddenly, could potentially destabilize markets, spark a pro-cyclical crystallization of losses and a persistent tightening of financial conditions,' Mark Carney, governor of the Bank of England, said in a recent speech.
 
Like all macroeconomic policy attempts to manage the global financial system, however, regulators are wielding a sledgehammer that can do as much harm as good unless it hits the right target:
 
"'We have got to make sure that we don't somehow create a whole artifice for one type of risk, which is different from the artifice of others,' says Spencer Dale, chief economist of BP and a former executive director for financial stability at the Bank of England. Mr. Dale says only around 2% to 3% of proven fossil-fuel reserves are actually featured on energy majors' balance sheets, limiting the danger of a sudden drop in the companies' value due to climate-change policies. 'The idea that somehow that we have a carbon bubble—in the sense that the assets that are currently on oil companies' balance sheets are overpriced, because they won't be able to use them—I don't think makes any economic sense,' he says."
 
The upshot is that there is a great deal of uncertainty about how exposed companies are, given that the full extent of the risks is also unknown. As such, regulators are trying to change the direction of the financial industry, without really knowing where they want to go:
 
"Because there are no unified disclosure rules, it is difficult to put a number on financial companies' exposures to carbon-heavy assets—and the risks associated with them. Estimates used by the ESRB suggest that banks, pension funds and insurers based in the European Union hold more than €1 trillion, about $1.1 trillion, in equity and debt of fossil-fuel companies and that major stock indexes could fall by as much as 20% if assets are revalued in line with a 2-degree scenario."
 
All of this wouldn't matter so much, except the stakes are so high.
 
Take care
David
 
David Chandler & Bill Werther
 
Instructor Teaching and Student Study Site: http://www.sagepub.com/chandler3e/
Strategic CSR Simulation: http://www.strategiccsrsim.com/
The library of CSR Newsletters are archived at: http://strategiccsr-sage.blogspot.com/
 
 
Regulators Examine Financial Risks of Climate Change
By Gabriele Steinhauser
April 1, 2016
The Wall Street Journal
Late Edition – Final
C2
 

Monday, April 18, 2016

Strategic CSR - Green bonds

 
This Friday is Earth Day. As such, this week's Newsletters will focus on sustainability issues.
 
 
The article in the url below indicates a subtle shift in corporate thinking regarding climate change. Beyond a recognition that it is occurring, it signals a willingness to invest in a solution (at the firm-level). Specifically, it indicates a willingness to issue new debt in order to invest in those solutions:
 
"Apple's $1.5bn green bond, announced last month, will fund several initiatives, including the company's conversion to 100% renewable energy, installation of more energy efficient heating and cooling systems and an increase in the company's use of biodegradable materials. A green bond, like a typical bond, is simply a way to borrow money, but it's issued specifically to fund environmental projects."
 
Along with the firm's recent announcement of a new recycling program and a reduction in e-waste (see here), Apple is increasingly taking the lead on sustainability issues:
 
"Lisa Jackson, Apple's vice president of environment, policy and social initiatives, told Reuters that the company decided to issue its green bond after December's UN Climate Summit in Paris, during which hundreds of companies pledged to fight climate change. With its bond sale, Apple has become the largest US company to have issued a green bond – although Toyota still holds the crown for the largest corporate green bond ever offered in the US with its $1.75bn green bond issued in 2014."
 
And, as a result of the increased corporate support, the value of green bonds that are being issued has grown exponentially (see this chart):
 
"The green bond market is still in its infancy. According to Climate Bonds Initiative, a UK nonprofit that tracks the market, the first green bond was issued in 2007, and the first corporate issuance didn't come along until 2013. Since then, a handful of high profile companies have jumped on the bandwagon, including EDF, a French power company, and Bank of America, which used the proceeds to loan money to cities and other businesses for installing solar panels, wind turbines and LED lighting."
 
This growth is predicted to continue into 2016 and beyond:
 
"According to Climate Bonds Initiative, the market, including government-issued bonds, reached an all-time high of $41.8bn in 2015, up from $36.6bn in 2014 and $11bn in 2013. Financial services company HSBC predicts between $55bn and $80bn worth of green bonds will be issued around the world in 2016, while the Climate Bonds Initiative believes sales will exceed $100bn."
 
Take care
David
 
David Chandler & Bill Werther
 
Instructor Teaching and Student Study Site: http://www.sagepub.com/chandler3e/
Strategic CSR Simulation: http://www.strategiccsrsim.com/
The library of CSR Newsletters are archived at: http://strategiccsr-sage.blogspot.com/
 
 
Can Apple's $1.5bn green bond initiative inspire more environmental investments?
By Alison Moodie
March 20, 2016
The Guardian
 

Friday, April 15, 2016

Strategic CSR - Social media

The article in the url below asks an important question:
 
"Does it turn out that social media is better at breaking things than at making things?"
 
In the article, Thomas Friedman answers that question by summarizing a TED Talk by the Google employee who helped launch the revolution in Egypt, Wael Ghonim. Following his experiences, both during the revolution and in its aftermath, Ghonim has drawn five conclusions about the general effects social media is having on online social interactions:
 
"'First, we don't know how to deal with rumors.' … Second, 'We tend to only communicate with people that we agree with.' … Third, online discussions quickly descend into angry mobs. … 'fourth, it became really hard to change our opinions.' … Fifth, and most crucial, he said, 'today, our social media experiences are designed in a way that favors broadcasting over engagements, posts over discussions, shallow comments over deep conversations.'"
 
As a result:
 
"'Five years ago,' concluded Ghonim, 'I said, 'If you want to liberate society, all you need is the Internet.' Today I believe if we want to liberate society, we first need to liberate the Internet.'"
 
Have a good weekend
David
 
David Chandler & Bill Werther
 
Instructor Teaching and Student Study Site: http://www.sagepub.com/chandler3e/
Strategic CSR Simulation: http://www.strategiccsrsim.com/
The library of CSR Newsletters are archived at: http://strategiccsr-sage.blogspot.com/
 
 
Social Media: Destroyer or Creator?
By Thomas L Friedman
February 3, 2016
The New York Times
Late Edition – Final
A23
 

Wednesday, April 13, 2016

Strategic CSR - Alternative energy

The article in the url below makes the case that, during a time when the market for fossil fuels has been suffering, the market for renewable energy has been exploding (in a good way):
 
"While two years of crashing prices for oil, natural gas, and coal triggered dramatic downsizing in those industries, renewables have been thriving. Clean energy investment broke new records in 2015 and is now seeing twice as much global funding as fossil fuels."
 
The article draws on 6 different charts to illustrate its main point, that the reason for the ongoing success of alternative energy is the huge efficiencies that have been created within the industry:
 
"Government subsidies have helped wind and solar get a foothold in global power markets, but economies of scale are the true driver of falling prices: The cost of solar power has fallen to 1/150th of its level in the 1970s, while the total amount of installed solar has soared 115,000-fold."
 
The reason I wanted to forward this article, however, is because it contains one of the most enlightening points I have seen in terms of the debate around renewable energy:
 
"The reason solar-power generation will increasingly dominate: It's a technology, not a fuel. As such, efficiency increases and prices fall as time goes on. What's more, the price of batteries to store solar power when the sun isn't shining is falling in a similarly stunning arc."
 
Thinking of alternative energy in terms of technological innovation conjures up Moore's Law, with rapid and continued performance stimulated by the creative juices of capitalism. Rather than something to be extracted from the Earth, alternative energies are discoveries waiting to happen. This would also explain why a company like Tesla, which is operating in an old, traditional industry, can draw the kind of consumer excitement that is reminiscent of Apple's best product launches.
 
Take care
David
 
David Chandler & Bill Werther
 
Instructor Teaching and Student Study Site: http://www.sagepub.com/chandler3e/
Strategic CSR Simulation: http://www.strategiccsrsim.com/
The library of CSR Newsletters are archived at: http://strategiccsr-sage.blogspot.com/
 
 
Wind and Solar are Crushing Fossil Fuels
By Tom Randall
April 6, 2016
Bloomberg Businessweek
 

Monday, April 11, 2016

Strategic CSR - LBJ

The article in the url below indicates how long we have known about the potential dangers of climate change and, as a result, how long we have delayed doing much about it. The article (published in February) celebrates the 50th anniversary of the first time a U.S. president highlighted the potential environmental risks of excessive carbon dioxide in the earth's atmosphere:
 
"President Lyndon Baines Johnson, in a February 8, 1965 special message to Congress warned about build-up of the invisible air pollutant that scientists recognize today as the primary contributor to global warming."
 
To quote LBJ in his address to Congress:
 
"'Air pollution is no longer confined to isolated places,' said Johnson less than three weeks after his 1965 inauguration. 'This generation has altered the composition of the atmosphere on a global scale through radioactive materials and a steady increase in carbon dioxide from the burning of fossil fuels.'"
 
The warning, however, was followed-up by action:
 
"The speech mainly focused on all-too-visible pollution of land and waterways, including roadside auto graveyards, strip mine sites, and soot pollution that had marred even the White House. Within the year, Johnson would sign six new environmental laws during a period better remembered for the strife that led to the Voting Rights Act of 1965 and the escalation of the Vietnam War. Johnson also that year established a dozen new national monuments, historic sites, and recreation areas; and submitted a draft nuclear non-proliferation treaty to the United Nations."
 
It is amazing to think that, in many ways, we have regressed in the subsequent 50 years and that LBJ would be the voice of progressiveness on this issue at such an early time:
 
"Beauty is not an easy thing to measure. It does not show up in the gross national product, in a weekly pay check, or in profit and loss statements. But these things are not ends in themselves. They are a road to satisfaction and pleasure and the good life. Beauty makes its own direct contribution to these final ends. Therefore it is one of the most important components of our true national income, not to be left out simply because statisticians cannot calculate its worth."
 
A complete transcript of the speech is available in the archives of LBJ's presidential library:
 
 
Take care
David
 
David Chandler & Bill Werther
 
Instructor Teaching and Student Study Site: http://www.sagepub.com/chandler3e/
Strategic CSR Simulation: http://www.strategiccsrsim.com/
The library of CSR Newsletters are archived at: http://strategiccsr-sage.blogspot.com/
 
 
A 50th anniversary few remember: LBJ's warning on carbon dioxide
By Marianne Lavelle
February 2, 2016
The Daily Climate

Friday, April 8, 2016

Strategic CSR - Security

The article in the url below reminds us that the best software infrastructure and security in the world is no match for the unpredictable nature of the humans with whom those systems have to interact:
 
"A survey of around 1,100 office workers at large companies in the U.S., U.K., Germany, France, Netherlands and Australia … found 20% said they would sell their corporate passwords to an outsider—and of those who would, 44% said they would do so for less than $1,000."
 
Moreover:
 
"While 85% said they would be upset if their personal information was breached by a company, 26% admitted they uploaded sensitive company information to a cloud app for the purpose of sharing that information outside the company."
 
While that should be enough to drive the most resolute CEO and Board absolutely crazy, I would like to see some more data about the situations that those willing to sell their passwords are working under. I am guessing the culture at those organizations is pretty toxic, no doubt compounded by a sense among employees that they are undervalued by management. I would think any CEO facing survey data that produced results anything like these should spend some time trying to understand the underlying factors driving this level of disenchantment, rather than railing against the employees willing to basically hand over the keys to the store.
 
Have a good weekend
David
 
David Chandler & Bill Werther
 
Instructor Teaching and Student Study Site: http://www.sagepub.com/chandler3e/
Strategic CSR Simulation: http://www.strategiccsrsim.com/
The library of CSR Newsletters are archived at: http://strategiccsr-sage.blogspot.com/
 
 
Survey Roundup: Passwords at a Price
By Ben Dipietro
March 25, 2016
The Wall Street Journal
 

Wednesday, April 6, 2016

Strategic CSR - Gift-giving

I have long believed that true altruism is a rare event in our lives – something that the human condition is not well suited for. For example, I believe that a great deal of charity occurs as much because it makes the donor feel good about themselves as much as the recipient benefits from the charity given. This also explains why a large proportion of aid and nonprofit activity is ineffective – there is often an ulterior motive that distorts the intended outcome (e.g., Strategic CSR – TOMS Shoes). The article in the url below summarizes some research to support this position:
 
"Those shopping for socially responsible gifts this holiday season, be forewarned: A recent study suggests they have the potential to disappoint. The reason, succinctly put: A fair-trade fruitcake is still just a fruitcake. In fact, socially responsible gifts are appreciated much more by the givers than the receivers."
 
Such gifts were classified by the researchers as gifts that were intended in some way to support a social cause:
 
"Socially responsible gifts include a range of things, such as charitable donations in the gift recipient's name, or so-called fair-trade products, such as a box of chocolates that directly benefits the cocoa farmers in some way that is better than what happens with other candies. The idea is to make someone feel good with a gift that supports a worthy cause on his or her behalf. Unfortunately, according to the study, it doesn't often work out that way."
 
The researchers also found that a "socially responsible gift" was more likely to be given the less close a person was to the giver. In other words, socially responsible gifts were more likely to be given to "acquaintances," while "friends" received more traditional gifts. The reason offered was that the givers were trying to frame the way they were received by the recipient:
 
"The study … also found there was a tendency, when the two people didn't know each other well, to want to give something that showed how much the giver cared about social issues, like fair-trade coffee."
 
There are all kinds of rituals surrounding the giving of gifts – especially the more formal the context becomes (e.g., business colleagues as opposed to family and friends). And I don't particularly think it matters if gift-giving is motivated as much (if not more) by personal gain than by its intended effect. The danger comes, I think, when the giver ends up doing more harm than good, especially when the intention was to help. The post about the counter-productive effects of TOMS Shoes (linked above) explores this issue in more detail. For a similar analysis in video form, see:
 
 
Take care
David
 
David Chandler & Bill Werther
 
Instructor Teaching and Student Study Site: http://www.sagepub.com/chandler3e/
Strategic CSR Simulation: http://www.strategiccsrsim.com/
The library of CSR Newsletters are archived at: http://strategiccsr-sage.blogspot.com/
 
 
Socially Responsible Gifts Are Great – Primarily for the Giver
By Simon Constable
December 14, 2015
The Wall Street Journal
Late Edition – Final
R4
 

Monday, April 4, 2016

Strategic CSR - Patriotism

I have noted before that I am constantly surprised that patriotism on the part of companies (paying their ‘fair’ share of taxes) is not more highly valued. This is particularly true in the U.S., but also elsewhere. The recent trend in inversions, particularly in the pharmaceutical industry, is evidence of the willingness of U.S. citizens (and politicians) to allow firms to avoid (bordering on evade) U.S. taxes:
 
“… the use of inversions [by U.S. corporations] is now entering its third year. Pfizer is trying the biggest one yet, a $152 billion deal for Allergan, the maker of Botox, which is based in Dublin.”
 
According to the article in the url below, however, the real value of inversion for firms lies in the associated policy of “earnings stripping”:
 
“A company completes an inversion deal and moves its headquarters for tax purposes outside the United States. The now-foreign company still has operations in the United States. These American operations are still taxed in the United States and pay taxes here. The point of the inversion, of course, was to reduce taxes as much as possible. So, the company arranges for the United States parts of its operations to borrow large amounts of money from the now-foreign parent. The indebted American subsidiary will pay interest on that debt to the parent. Under the United States tax code, the interest payment can be used to offset the American earnings. VoilĂ ! The earnings of the company are now offset by these interest payments. What used to be a significant tax bill disappears.”
 
In other words, while inversion allows firms to pay tax on its foreign earnings at the rate of its new foreign home, it still requires firms to pay U.S. taxes on revenues earned in the U.S. Alternatively, earnings stripping allows the firm potentially to avoid paying any U.S. taxes at all, which only increases my surprise that this lack of patriotism (a willingness to support the country that enabled the firm’s success and in which it is largely based) is not more of an issue:
 
“If you are an American taxpayer, it means the burden of making up lost revenue falls more heavily on you. It also creates an uneven playing field for other companies that end up feeling like fools for staying put. All in all, it highlights the problems of the United States tax code, which shows again and again how it just does not work in an increasingly global world.”
 
While the U.S. tax code certainly needs reforming, the real reason these avoidance practices continue is that stakeholders do not care enough to do anything about them.
 
Take care
David
 
David Chandler & Bill Werther
 
Instructor Teaching and Student Study Site: http://www.sagepub.com/chandler3e/
Strategic CSR Simulation: http://www.strategiccsrsim.com/
The library of CSR Newsletters are archived at: http://strategiccsr-sage.blogspot.com/


If You Think Corporate Inversions Are Bad, Brace Yourself
By Steven Davidoff Solomon
February 10, 2016
The New York Times
Late Edition – Final
B5
 

Friday, April 1, 2016

Strategic CSR - Beer

The article in the url below presents an interesting twist on the recycling debate. In particular, recycled water:
 
"In autumn of 2014 – three years into California's devastating drought– architect Russ Drinker became fixated on brewing beer from recycled greywater (that is, water that's been treated after use in sinks, showers and washing clothes). He was increasingly frustrated that the media paid little attention to water recycling. 'They were focused on conservation instead. But if Californians really want to have an impact on our water use, we have to recycle our freshwater ... and get over our psychological resistance to that.'"
 
This is a question that should be of concern to all drinks companies that rely on water as the basis for their product:
 
"While some microbrewers have been working hard to get their water usage down – some to three gallons of water for every gallon of beer – the industry has a high water to beer ratio. Despite this, it took Drinker about a year to find a brewer up for the challenge."
 
In the end, he teamed up with Half Moon Bay Brewing Company, a craft brewer based in San Francisco, to produce a version of its "Mavericks Tnuuel Vision IPA" using recycled water, which the company then put to a panel of tasters for a blind test:
 
"Made using the same Nasa water recycling technology as astronaut Scott Kelly used during his year long stint on the International Space Station, the tasting panel couldn't detect which of the two pints was made with recycled water."
 
The article mentions other breweries around the U.S. that are also using recycled grey water in their brewing process.
 
Have a good weekend and Cheers!
David
 
David Chandler & Bill Werther
 
Instructor Teaching and Student Study Site: http://www.sagepub.com/chandler3e/
Strategic CSR Simulation: http://www.strategiccsrsim.com/
The library of CSR Newsletters are archived at: http://strategiccsr-sage.blogspot.com/
 
 
The Californian craft beer brewed from waste Our Broken Environment Kills a Quarter of Us
By Kristine Wong
March 14, 2016
The Guardian
 

Wednesday, March 30, 2016

Strategic CSR - GMOs

The national debate here in the U.S. about food labelling is heating-up. In particular, it is the issue of genetically-modified organisms (GMOs) that is the battleground of choice:
 
"The country's first law requiring mandatory GMO labels is slated to go into effect in Vermont on July 1 after an industry-backed federal law that would block states' authority stalled in the U.S. Senate [recently]."
 
Given the extent of the fines associated with a failure to comply, it looks like the Vermont legislature is serious about enforcement and, as a result, the food companies have to be serious about compliance:
 
"Facing fines up to $1,000 a day per product, food makers from giants like General Mills Inc. to regional businesses like Vermont Fresh Pasta are making big adjustments, many of which extend beyond the state's borders."
 
As the article explains, the law in Vermont is ground-breaking not because Vermont is an important market, but because the nature of the supply chains of large, multinational companies is that they prefer uniformity, since it reduces costs. When the issue is legal compliance, in order for a firm to comply and also be consistent throughout its supply chain and all markets, it forces all operations to adhere to the highest standards of the strictest areas:
 
"Vermont is a tiny market for most companies, but the integrated nature of supply chains gives it an outsize effect. On Friday, General Mills said it is slapping GMO labels on its packaged food nationwide, saying it would be too complex and expensive to create a separate distribution network for the 626,000-person state of Vermont. The maker of Cheerios and Lucky Charms remains firm in its stance against mandatory labeling, but 'having one system for Vermont and one for everywhere else is untenable,' said Jeff Harmening, General Mills' chief operating officer of U.S. retail."
 
I see this action by Vermont as an excellent example of a stakeholder (the state legislature) holding an industry to account based on its expectations of what constitutes socially responsible behavior. As this chart in the article indicates, GMOs are already out there – the least the regulatory authorities can do is make consumers aware of the ingredients that are in the food they are buying:
 
 
Here is an example of what a label that complies with the new law might look like (see the box labelled "Produced with Genetic Engineering"):
 
 
What I would like to see now is an informed debate about the pros and cons of GMOs (including the science around these organisms), not only in the developed world, but in many emerging markets, too – something I have yet to see at any kind of broad level.
 
For more details about this story and its wide-ranging effects, see: http://www.theguardian.com/sustainable-business/2016/mar/24/gmo-food-labels-general-mills-kellog-mars
 
Take care
David
 
David Chandler & Bill Werther
 
Instructor Teaching and Student Study Site: http://www.sagepub.com/chandler3e/
Strategic CSR Simulation: http://www.strategiccsrsim.com/
The library of CSR Newsletters are archived at: http://strategiccsr-sage.blogspot.com/
 
 
GMO Labeling Law Roils Food Companies
By Annie Gasparro and Jacob Bunge
March 21, 2016
The Wall Street Journal
Late Edition – Final
B1