CSR resources galore!

Today at lunch, I attended a seminar by Sandra Waddock, a well-recognized professor at Boston College who is also closely associated with BC's Center for Corporate Citizenship. She is on sabbatical this year at Harvard, as a visiting scholar at the Kennedy School's CSR Initiative.

Waddock has made the brave move of doing descriptive work in the CSR field - I say brave because it's highly useful, and yet academics often turn their noses down at anything that doesn't involve opinionated analysis into a highly-specific area.

She has compiled a wealth of information about what comprises the CSR landscape - the guidelines, instututions, terms, publications, etc. It's much like my own "resource website" (see link at right), but on steroids.

Here is a direct link to Prof. Waddock's paper and also to her powerpoint presentation. Check it out - it's amazing!

Curriculum Change - the Reality

I was at a meeting yesterday for Harvard Business School's "Social Enterprise Initiative" - a group of professors and administrators who are each individually very dedicated to topics such as corporate social responsibility, social entrepreneurship, climate change, non-profit management, etc. The reason I say this is to point out that the group as a whole is very much in favor of changing the MBA curriculum to include more of these topics, and they are particularly well-positioned to do so.

The interesting thing is that this isn't at all easy.

Essentially, the aspects that drive topic selection for cases, and case selection for courses, are twofold: 1) what the course itself needs in terms of conceptual learning, and 2) what the professor happens to bump into and be intrigued by.

A professor would be foolish to waste class time on something that doesn't have a useful teaching purpose - so, for example, the Patrimonio Hoy case can't be taught in a finance class if it's just about helping poor people build homes, but if it's re-written to bring out the lessons on time-value of money in an environment where discount rates are extremely high, then suddenly it becomes "worth" the class time. If the case can engage students on an important issue at the same time, that's fantastic - but professors won't teach it for that purpose alone. They see, quite reasonably, their primary role as teaching business skills not advocacy.

But will a professor say to himself or herself, "gee, I need a case on the time value of money, what can I find that will have a social purpose as well?" Not often. Instead, good professors are buffeted by interesting ideas all the time, and it become a matter of sorting through what's already in front of them. Screening out unsolicited suggestions becomes a defense mechanism for their time and sanity, and so they end up listening to trusted colleagues when thinking about which cases are worth using in class, or worth writing from scratch.

So for groups out there who want to get more CSR into b-school curricular, these are your challenges and also your advice - find ways to make it relevant, talke to professors you know or others who know them well, and then further tailor the ideas to fit even better with that particular professor's teaching agenda.

Most people want to help the good causes of the world, but with so many competing demands, it helps to make it easy for them.

NEWS SUMMARY - 11/21-11/27

In recent CSR news...

• Milton Friedman' s death caused columnists everywhere to ponder his famous statement that "The Business of Business is Business" - and what Friedman himself really meant by that. The Wall Street Journal ("Milton Friedman Was Right" 11/24/06), The Age ("The Blurred Lines of Being Responsible" 11/22/06) and WorldChanging (Milton Friedman and the Social Responsibility of Business 11/18/06) are just some of the articles that touch on this theme.
• As the holiday shopping season gets underway, sustainable gift ideas are all the rage. For example: the Wall Street Journal' s "Rudolph the Recycled Reindeer" (11/24/06).
  
• Some big companies are battling reputational crisis, as " Coke Joins the Battle for the Brand" (Financial Times 11/21/06), Johnson & Johnson deals with allegations that its stents are " Dangerous Devices" (Forbes 11/27/06), and Nike fires Pakistani soccer-ball manufacturers for sub-contracting to at-home workers who cannot be adequately monitored ("Nike Says Monitoring System Working," Associated Press 11/21/06).
• In the latest instance of an issue made more complicated by the Internet, advertising bans on smoking don' t do much good if tobacco firms have easy and free access to millions of teens via YouTube, where videos of sexy, smoking teens are possibly being posted by tobacco manufacturers to recruit the next generation of smokers. (See " Whiff of Tobacco Firms on Net" )
• While the previous decade saw the Internet spur the rise and fall of fortunes, a Times (UK) columnist and managing principal of Green Order argues that this decade will see the environment change everything. He predicts that the "next Bill Gates" will be an environmental entrepreneur, because solving the climate change challenge is the greatest economic opportunity of our time. (See " Coming Soon: a Green Bill Gates" )

New site: www.DoTheRightThing.com

I love this new site! One of the co-founders (Rod) contacted me directly with a pre-launch password, and I explored it just now - it's awesome.

Basically, Do The Right Thing is a grassroots system for evaluating the social impact (positive or negative) of various companies. You can post news stories/summaries/analysis, rate others' postings, and look directly at company profiles. The site seems to use a technology similar to Digg, but has tweaked the software to suit its own purposes. The result, hopefully, will be that a quick visit to the site will allow a busy person to read something interesting and relevant right away - while at the same time allowing enthusiasts to add real depth to the content.

On a systemic level, this is an incredibly important tool. I'm a huge proponent of individuals acting on their values in their purchasing, investing, and other economic decisions - because that provides incentives for companies to adopt those values. But there's an information gap, since individuals have limited time to research these issues, and the information itself is both scattered and biased.

As corporations pay more and more attention to CSR, they increasingly focus on PR strategies to appear responsible - and these can be difficult to distinguish from real action. Having a very democratic system of filtering through all this information can allow individuals to see what other like-minded individuals have to say about certain companies.

If, for example, Company X were to be involved in a scandal, this network could quickly organize a boycott to show its disapproval. Alternatively, if Company X were to launch a product with impressive environmental qualities, individuals might buy it as gifts for family and friends. If a company wanted to know how a certain incident or product was affecting its reputation, it could look on the website to see how related posts were being ranked (each receives a score for impact, either negative or positive). These are all ways in which DoTheRightThing could, to put it in economist terms, make the market for values more efficient.

They launch in a few days, so check it out!

NEWS SUMMARY: 11/13-11/20

Last week, in CSR news:

Perhaps because the buying season precedes the giving season, everyone seems to be writing about consumer habits – first, an extensive report by the World Wildlife Foundation (“Let Them Eat Cake”) proclaims a new surge of interest in responsible brands. Then the New York Times discusses how retailers are tying an increasing variety of products (“Candles, Jeans and Lipstick,” 11/13/06) to social marketing campaigns, and donating a share of product profits to charity. Looking at how consumers say they intend to spend their money, Boston-based Cone Communications finds that “Holiday Shoppers Want Businesses to Help Them Do Good” (SocialFunds.com, 11/13/06).

Grocery-store purchases are showing a trend toward ethical consumerism, as “PepsiCo Launches Products at Whole Foods” (Associated Press, 11/13/06) to reach consumers interested in health and organics, and Fair Trade is launching Oké Banana in the US, so American consumers can now buy “A Banana That Makes You Feel Oké” (Press Release by Oké USA, 11/14/06)

The past week has also seen a couple of articles with interesting critiques of the CSR field. In particular, a New York Times piece questions the effectiveness of a field that has become a “safe space” for businesses rather than a vehicle for fundamental change to the system in which they operate (“The Paradoxes of Business as Do-Gooders,” 11/11/06). The second proclaims that the CSR movement is a political tool of the Progressive Left, and has become a bigger threat since the recent elections – making the business sector a “trojan horse” through which to implement policies that voters rejected at the ballot box (see “CSR and the Democratic Takeover,” Townhall.com 11/17/06).

Finally, the trend toward hybrid models of business and philanthropy is getting noticed, in particular through an in-depth article in the New York Times called “What’s Wrong with Profit?” (11/13/06); the Wall Street Journal covers a case in point – a bank that invests in ventures that aid the environment (see “Business Technology: New Resource Bank…” 11/14/06) .

Global CSR and "The Responsibility Paradox"

I'd like to link you to my very favorite academic paper on CSR - it's by some professors at the Univeristy of Michigan and it's called "The Responsibility Paradox: Multinational Firms and Global Corporate Social Responsibility." You can download it here.

This paper does an amazing job of following the social role of the corporation through time, from the late-18th century through today, and tying different trends together. For example, prior to globalization it was relatively easy to identify a firm's "community" - headquarters, manufacturing, retail and waste disposal would all happen in more or less the same place. It was easier to invest in the community, because the company itself could reap the rewards of that investment. This was the "factory town" model.

Over time, corporations have become what some would describe as a "nexus of independent contracts" - connecting a factory with a brand, a product with a market, and housing its official headquarters in an airport warehouse in some conveniently low-tax locale. So the question "to whom are corporations responsible?" becomes much more complex.

The authors (Gerald Davis, Marina Whitman, and Mayer Zald) say all this, and so much more, far more eloquently than I have here. If you read one "academic" paper this year, this wouldn't be a bad choice.

Innovative Financing for Social Enterprise

It can be difficult to put boundaries on what falls within "corporate social responsibility," but a field that is at least closely related is Social Enterprise. It's not corporate, but instead it's another model that "business" can take, and one that puts greater emphasis on values and social change than on profits.

There's a new took for funding individual social enterprise, and Esquire Magazine is calling it "The E-Bay of Loans" (October 2006, p. 207). In particular, two companies (Prosper in the US and Zopa in the UK) are enabling individuals with money to invest to connect with people who need a loan - many of them social entrepreneurs. Investors can take into account the individual's credit rating, requested interest rate, and description of why he or she needs the money.

Also, there's a really neat auction-like feature that basically compiles all the willing lenders who offer money at less than the maximum interest rate that the borrower has set; after the total loan is full and before the bidding period is over, only lower interest rates are accepted - so that in the end, the borrower has the lowest possible rate.

Until now, it has been very difficult for a non-wealthy individual to have a significant amount of discretion over the values that he or she is embracing as an investor - usually all we can do is choose the "social" mutual fund out of the dozen choices we are given. This is a way in which indivuals can choose to invest as little as $20 on a project and a person they truly believe in.

News summary: 10/30-11/6

Last week's CSR news was less voluminous than usual; I assume that a greater proportion the news is being devoted to poltics in the run-up to today's elections - and that next week may similarly focus on the effects of whatever happens today. Of course, it would be great if voters were really concerned with how these business issues are being regulated and represented by our politicians, but that's mainly an aspiration in the U.S.

The highlights in company news included:

• KFC is phasing our trans fats from its fried chicken
• Microsoft is reconsidering its China business for human rights reasons
  
• BP apparently knew long ago about safety issues at its Texas City refinery

The mining industry had a couple of interesting (and opposing) articles. In Ghana, a reporter sharply criticized government promotion of mining due to its negative effects on the local population and environment. Meanwhile, in Venezuela, Hugo Chavez says he is shutting down various mining operations because of environmental concerns - but miners have protested the loss of their livelihood, causing Chavez to send in troops which have killed at least six miners.

I will try to keep new news round-up as a more regular feature.

Are social and environmental solutions on a collision course?

At the WorldChanging book launch on October 28, Bruce Sterling made a quip about the most environmentally-sustainable people being dead people. He talked about how so much of what we do damages the environment, and most of our talk about environmentalism involves reducing the impacts - but is rarely about getting to the point of fully eliminating the harm we impose on the earth. He then expressed an aspiration to do better, though I wasn't quite clear on how he was proposing to do that.

On November 1, I attended the North America launch of the Global Alliance for Improved Nutrition (GAIN), and heard some compelling statistics about worldwide hunger and malnutrition. The most memorable was the number of child deaths that can be attributed to the underlying cause of malnutrition - each year, this number is approximately the population of Japan. And tragically, it isn't even particularly difficult or expensive to provide vitamin and mineral fortification. This is why the Gates Foundation is underwriting the GAIN - because the money invested has potentially very high social returns, in terms of lives saved.

Why am I telling these two stories back-to-back? Because they seem to shed light on a very difficult reality: the social and environmental causes are somewhat opposed. The Earth is suffering, in some sense, from overpopulation. We can do a lot to reduce each individual's impact on the earth, but we still don't know how to get that impact to zero. And humanity is suffering from poverty and disease, which are obviously in need of attention from those of us lucky enough to live healthy and wealthy lives.

Does anyone see the disconnect here? What if the world's population grew even faster than it is today - say, by the size of Japan every year? What would happen to the planet? Would our eco-friendly innovations be able to keep up?

The WorldChanging team embraces a philosophy of hope, with contributors promising to avoid "apocalism" and the presentation of problems without corollary solutions. I like that attitude, in the sense that it creates a website where people go for solutions. Such a website is a useful thing for the world to have.

At the same time, I can't be lulled into thinking that every problem has a known or easy solution. The conflict between saving lives and saving the earth appears to be a case in point. What are the solutions? Will we need to moved toward a worldwide "One Child" policy? Will our innovations be sufficient? I don't have the answers - but I hope that, by asking the toughest questions out loud, perhaps we can bring more attention to the search for solutions we haven't yet found.

If you believe that I'm wrong about this "collision course" (and I hope I am wrong), please write to tell me why. I'd be very happy to post another viewpoint on the issue.

WorldChanging: A User's Guide to the 21st Century

Fortuitously, I happened to be in Seattle on October 31st for the launch of the WorldChanging book, aptly named A User's Guide to the 21st Century. This book is already becoming big news, so I'd like to put some early information and opinions here.

First of all, the website and blog WorldChanging.com are phenomenal - the issues are timely and signficant, the writing is excellent, the images bring the issues closer, and new posts come several times per day. Some of the WorldChanging blog entries appear to be the best source I can find on particular issues - for example they ran a great piece on the forthcoming Blood Diamonds movie. If you are one of the "practically-everyone" that takes procrastination breaks at work, it's a great site for that.

Secondly, a comment on the Seattle event: it was a little disappointing. The "tour" information on the website was sparse, so I didn't know what to expect - but it turned out to be a discussion between WorldChanging co-founder Alex Steffen and cyberpunk author Bruce Sterling. The latter seemed to be trying to live up to some sort of radical in-your-face image, but ended up rambling and coming up with preposterously simplistic aspirations. The crowd found his jokes funny sometimes, but I tend to resent people who waste activist energy trying to be edgy rather than practical. I don't know if this negative review will hurt my chances of joining the soon-to-be-established team of WorldChanging local bloggers, but so be it. This blog is my chance to express my candid and unaligned views about things that matter.

And finally, the book itself. WorldChanging: A User's Guide to the 21st Century is fantastic in a way, but also has its weaknesses. For the sheer amount informations about our world's social and economic problems (and real or potential solutions), it appears to be unrivaled - and therefore worth a spot on your bookshelf or even your coffee table. However, the weaknesses are that it's too much like an encyclopedia - without the benefit of an organizational structure that makes it useful for looking things up. So you don't quite read it from cover-to-cover, and you don't quite ask questions of it. What do you do with it? I think you just pick it up and open to a random page, potentially withing a broad topic that you find interesting - but it seems that so much more could be done with this information to make it accessible to readers. Given the unweildy format, I think the book may end up having only a niche audience of readers who already care enough to wade through 609 pages of pasted-together blogs. Regardless, pre-publication it was already in Amazon's Top 100, and a leading researcher I know received at least 5 emails about it just this past week.

Even if the book doesn't quite live up to my (very high) expectations, it's encouraging to see the phenomenal amount of interest it has generated - showing that there is an audience for this sort of book. And that says good things about the audience.