Values-based shopping at Alonovo.com

A few days ago I came across a website that fits nicely with my shopping-season mantra of values-based consumerism: www.alonovo.com. It's slogan is "intelligent marketplace" and it's mission is "to connect the concept of corporate behavior directly to the profit motive."

Shopping from this site helps you save the world in several ways, each of which I happen to think is pretty neat:

• Like many online shopping sites, this one collects revenue from Amazon for directing buyers to them - but these guys donate at least 20% of their ad revenues to charity. If you register with the site, you can choose which charity you'd like to support from a long list, but registration is not required to shop.
  
• Next to each product is an easy-to-spot and easy-to-read chart with a "value rating" for the company that sells it, based primarily on data from KLD and the Federal Elections Commission. You can view five sub-ratings (CSR, environment, workplace, ethics, and customer focus) without registering, and more detail after you register.
• After registering, you can also set your own relative values, so that the ratings become personalized to the issues that are most important to you.

There are a bunch of things that I like about this set-up. One is that it's as easy as you want it to be - no registration required and easy-t0-read charts. And yet, the more detailed data is there. In fact, accessing KLD's Socrates database is usually quite expensive, so having some of its data available for free is a huge plus. Also, indicating what's important to you as an individual has the potential to educate companies much more rapidly on what's really important to consumers. Finally, if you're using the site as an alternative to a trip to the mall, think of all that petroleum and CO2 you're saving!

GOOD's new social-networking feature

I've blogged before about the new socially-oriented social networking site Rethos and 1Bloc - and now I know of a third: the GOOD Community. This once takes being hip much more seriously as a way to engage young people in worthwhile causes. The website is still a little rough, but it's generated a lot of excitement - over 10,000 subscribers already!

Also, GOOD had an event right around the time I was writing about "Shopping for Values" - it was hosted by the Ralph Lauren "Rugby" store on Boston's swanky Newbury Street, and a portion of proceeds from sales that night went to a few GOOD-linked charities.

I met Ben Goldhirsh there, and pitched an idea to him - it's a book proposal I've been working on for a while, for something that would generate more thoughtfulness and enthusiasm among mainstream audences about the social/environmental impacts of their purchases, investments, jobs, commutes, etc. More on that idea later. It deserves it's own blog post.

Oxfam and Unilever: understanding the BoP

I was just at a meeting with Oxfam representatives, who came to Harvard Business School for feedback on a recent report, for which they had partnered with Unilever to study they company's impacts in Indonesia. The report covers a broad range of impacts - supply chain practices, value to consumers, the distribution of company profits among stakeholders, and much more. It's very lengthy, and full of useful data.

Essentially, Oxfam wants to figure out how to calculate a "poverty footprint" for a given company in a given country, and this report is the first attempt. They are now examining the methodology, and looking at what might be done better in the future.

This sort of exercise seems especially wise and timely as people in all sectors are getting excited about the "BoP" - or the Bottom of the Pyramid, a phrase coined by author C.K. Prahalad. The excitement has been good for getting business engaged in poverty reduction, but I've also been bothered by the lack of critical thought in some of these discussions. More business doesn't always or automatically help the poor. I'm glad Oxfam is trying to understand when it helps, when it hurts - and what can be done better.

NEWS SUMMARY - 12/11-12/18

News Highlights:

• Viral marketing seems to be a new area in which companies can have fiascos. In fact, this week I’ve seen a new term: a “flog” is shorthand for a “fake blog.” This is being used to describe corporate PR masquerading as unaffiliated content, and people are not reacting well to it. Last week’s News Brief covered YouTube’s cigarette videos and Wal-Mart’s fake-blog controversy. This week, Sony was also called out for its less-than-transparent hip-hop blog, alliwantforxmasisapsp.com. (See “Business Blogging Lesson Still Not Learned”)
• Consumer-driven CSR continues to gain ground, as alonovo.com transforms Its cause-based "social values shopping program" for 2007.
• Lots of regulatory news this week, in several countries:

1. Australia’ Corporations and Markets Advisory Committee decided to leave its Corporation Act unchanged, rejecting proposals to force companies to further incorporate the interests of a broad range of stakeholders. Commentators say that the decision may be made for now, but the debate has only begun.
   
2. SocialFunds.com ran an interview with Ambassador Elisabeth Dahlin explores how the Swedish government facilitates corporate responsibility.
3. U.S. officials participated in conference on CSR inBrazil; but the Justice Department abandoned some of the tough tactics it used to fight corporate crime in the post-Enron era.
4. Starting in 2007, we can expect the Chinese government to start buying green as new "green procurement" policies are implemented for both central and provincial governments.
   

Transparency in the News Media: A Moment of Self-Criticism

As many of you may know, I have a part-time gig with the Center for Corporate Citizenship at Boston College. Every week, I review all the CSR-related news that I can get my hands on, decide what's most interesting or important, and compile that into a News Brief that goes out to staff members of the Center. I also forward a copy to my boss at Harvard Business School, to keep him up-to-date as well.

The main reason I do this is to force myself to keep abreast of all the latest developments in the field. It's a big time commitment, and often I wish I had my weekends back - but I always end up feeling glad to be so well-informed.

Lately, I've been trying to leverage this knowledge in different ways - as has the Center. Because most of the articles are copyrighted, we can't distribute the News Brief itself, but I've begun posting news summaries on this blog every Monday, with the goal of helping anyone interested in the field stay current without a big time commitment. Also, a few months ago Martin Smith read this blog and decided that similar content would be great for 1Bloc - so I'm now writing an occasional article for that, and working toward some weekly news summaries.

Meanwhile, the Center has also been trying to leverage my time investment. I've started sending extra emails on new trends and key highlights to the woman who compiles the news section of the Center's newsletter, which is distributed more widely. Also, someone else at the Center is planning to send the headlines-only section of my News Brief, with links, to all corporate members.

So my research is becoming the basis of three different communications at Boston College, and for three different personal purposes. In some ways, this is great - but in others, I'm starting to get concerned.

The other day, I was talking to my boss following his seminar on "CSR and the 7 Deadly Sins" when BC professor Sandra Waddock stopped to introduce herself. As I listened to the two of them talk, I heard them confirming each other's assessment of the key issues in the CSR field - and I wondered, how much of an influence did I have?

These two professors thought they were coming from different schools and with different experiences - but each reads my News Brief every week. In their brief discussion, they seemed to be validating each other's perceptions of current trends in the field. But if each of them was relying on the same source, the similar perceptions would be a false reassurance.

Not to overstate the issues, but Noam Chomsky makes a similar argument about the New York Times - that it sets the news agenda more than people realize. Seeing a topic come up in multiple news sources seems to give it more validity, and we often don't notice if all those mentions are tracing back to a single source.

The CSR world is very very small. Walk into a conference or cocktail party, and you're bound to know several people from several organizations. This can be reassuring, but it can also be counterproductive. We can end up feeling reassured that we know what's going on, simply because we share perceptions with the other members of a very small and closely-interconnected group.

I don't know exactly what to do about my newfound concern. Transparency, I suppose, is one part of an answer - and that's what I'm trying to provide in this blog-posting. Thoughtfulness in compiling my news summaries should also help - it should be an extra reason to read as much as I can and to include a diversity of opinions.

Another part of the solution would be for you, as a reader of this blog, to email me with news stories you've read, with comments when you think I've gone wrong, and with direct advice on how to address this issue in general.

One problem, however, is that I can't cover all the news that's out there - there's simply too much volume, both in terms of the hours I can devote (10 per week), and the page limit I've been given (~60 pages of articles per week). So I frequently miss out on articles. My job has not been defined as covering everything - just as putting an interesting News Brief together. But is it my social responsibility to cover more, in order to present current trends more accurately?

Shopping for Values

Exciting news for me - I have an article of my own posted on the 1Bloc website! Here is the link: http://www.1bloc.com/default.aspx

For those who don't know it, 1Bloc is a new social-networking site for "social innovators" to connect with each other. The founder ran across my blog, and invited me to apply for the editorial board - so that is the basis of my involvement with them.

1Bloc is an outgrowth of StartingBloc, which seems to be the most widely-known and respected organization for social entrepreneurship at the undergraduate level. StartingBloc has a fellowship program, which allows undergrads and young professionals to participate in several "institutes" over the course of a year. These sessions seek to provide the "training, experience, and networks necessary to drive social, economic, and environmental innovation through their careers and lives as engaged citizens."

I'm very proud to be part of the new site, and to be allied with the great work StartingBloc has been doing. I see some of these networks layered by age or education level, and I'm hoping to help connect those layers over time - or at least see what's going on in each of them.

Please consider joining 1Bloc. (Remember, if you join early you get the best usernames!)

CSR and the 7 deadly sins

Today I attended a talk by Dutch Leonard, a professor at both Harvard Business School and at the Kennedy School (and who just happens to be my boss) - it was on the topic of "CSR and the 7 deadly sins." He said he's never had a topic attract so much attention simply from the title alone.

I'm excited to be able to post about this idea, because it's something we've discussed before, but I didn't think it would be fair to blog about it before it's been presented publicly.

The basic argument is that certain traits are part of human nature - and that's why we have moral codes against them. In the case of the seven deadly sins, these are Sloth, Greed, Wrath, Lust, Gluttony, Envy and Pride.

If you think about this from an evolutionary perspective, these traits are adapted to a much earlier environment - one that was calorie-scarece and didn't involve so many close neighbors. But today's world is quite different, and evolution is a slow process, so at this point they are mal-adaptations. They are human weaknesses.

In the business world, there is a school of thought which says that choice and freedom are inherently good, and more of them is better, consumers are rational, and if people make "bad" decisions they have the right to. I find this to be one of the more compelling arguments in the anti-CSR contingent.

However, when you look at human nature and the choices we make in terms of evolutionary weaknesses that have been hard-wired into us (or, if you take a religious perspective, that have been part of man's downfall for millenia) - then the "choice" defense isn't so air-tight.

Dutch makes the point that corporations can have several level of engagement with these human weaknesses. They can:

1. ignore them, but offer what people want to buy.
   
2. purposefully neglect to disclose some of the ill effects of products such as junk food and cigarettes.
3. proactively design products that exploit these weaknesses in order to activate customers.

In the tobacco industry, all of these things happened - and that may be why the public outcry was so intense. It's one thing to offer freedom of choice, but another to adapt your products to take advantage of people's baser instincts.

This is a new vein of research for him, so the "answers" are still in development, but he mentioned "consumer-driven CSR" as one key area that might drive companies to design products with better morals in mind.

Coincidentally, I've been working hard on my own article about just that! Stay tuned for more on that.

NEWS SUMMARY - 12/3-12/11

• Harvard Business Review has come out with a lengthy article on Strategy & Society, written by Michael Porter and Mark Kramer.
• Consumer buying habits are key around the holidays, and Golin/Harris has released its fourth national survey, "Doing Well by Doing Good 2006." In the Economist, ethical food shopping is explored in "Voting With Your Trolley."
• A look behind the scenes at Wal-Mart shows how a savvy political advisory group has managed to improve the image of “Candidate Wal-Mart" considerably.
• As the major reporting season approaches, the Prince of Wales announced his new “kitemark,” which will signal high-quality environmental reporting. This is particularly useful as the number of social responsibility reports skyrockets – the Christian Science Monitor puts the number at about 2,000, up from several hundred a couple of years ago.
• The obesity issue is gaining ground, as New York City health officials unanimously vote in favor of the proposed ban on trans fats from the city’s restaurants and food stands, and Boston officials consider doing the same thing. Overseas, McDonald’s tries to head off criticism in China by designing a nutrition curriculum for elementary schools (Financial Times, 11/25/06), while Burger King fails to head off such problems in Spain, where it’s XXL burger advertising drew the ire of regulators.

NEWS SUMMARY - 11/27-12/03

• December 1 was World Aids Day, and many publications recognized it through thoughtful articles. In particular, the Financial Times ran a piece on “Business and Aids” that urged the private sector to do more.
• The EPA has been arguing before the Supreme Court that its mandate does not include carbon dioxide, while a coalition of states is arguing that it does. Plenty of news outlets are covering the regulatory dispute, including the New York Times (see “Justices' First Brush With Global Warming," 11/30/06).
• Several news items from the auto industry: Apparently, General Motors has seen the light, and is now investing in electric cars and hybrid technology, which it hopes will not only boost sales of those cars at some point in the future, but also help with the company's flagging image today. Meanwhile, Volkswagen AG and DaimlerChrysler AG are experimenting with cleaner forms of diesel - clean enough to meet Californa's strict environmental regulations.
• For researchers in environmental science, the big news of the week is the just-unveiled GEONETCast tool, which can provide environmental data worldwide and free of charge (see “The Pulse of the Planet”; The Economist 12/02/06).
• Starbucks is in the news, getting a bad rap for opposing an Ethiopian effort to trademark natively-grown coffee beans (The Times Online, 11/27/06); some feel that while Starbucks had generally been seen as a good corporate citizen, this move will just make it seem greedy.
  
• BP is also being called out for hypocrisy (see TownHall.com 11/25/06), as the company settled a lawsuit related to its Texas City refinery accident of last year, which killed 15 workers and injured 170. The company's environmental marketing had been quite compelling, but Forbes also noticed the discrepency this week in its article "When is Being Good Not Good Enough?" (Forbes, 11/28/06)
• Also, check out this WorldChanging piece on a very creative and beneficial use of advertising space - a billboard that is also a solar panel, used to power the local school!
  

Forbes Magazine on Corporate Citizenship

Check out the extensive "special report" section in the latest issue of Forbes. These articles address some great big-picture questions. Here is the list of articles, as the magazine describes them:

• "Can Corporations Save the World?" (Businesses have donated nearly $14 billion to cure society's many ills. But are they funding hope or hype?)
• "The Best Corporate Citizens" (When consumers were asked to name the most socially responsible companies around the world, they had some surprising answers.)
• "When is being good, not good enough?" (Despite their relatively progressive practices, Starbucks and other socially minded firms can’t seem to help being slammed by activists.)
• "New Lessons in Corporate Citizenship" (Courses in corporate social responsibility are becoming a requirement at most B-schools. But can you teach an MBA to care about CSR?
• "Is Corporate Social Responsibility Responsible?" (Not if companies spend shareholder assets on unprofitable causes.
• "Going With the Flow" (Clean water brings health and prosperity to the developing world –while improving Coca-Cola’s image.)
• "Achieving Corporate Citizenship" (How to merge profit, principle and purpose to serve an expanding list of constituencies.)

Quite coincidentally, I sort of know Steve Forbes. He started a student business magazine with a couple of friends when he was at Princeton as an undergraduate. It's called Business Today, and it's still going strong. I was Editor-in-Chief from 1997 to 1999.

Anyway, having met Forbes and worked on his brainchild, I'm very struck by the evolution in thinking about what topics are germane to business leaders and to a business magazine. It's remarkable to think that in just a few years, the dialogue has expanded so much.

The Upcoming Crisis in Microfinance

I recently wrote a case on a microfinance organization, and that gave me the opportunity to learn a great deal about the field. Microfinance is an amazing idea that took a long time to gain acceptance, but it's also a limited tool that is becoming too popular for its own good. Fortune Magazine seems to be the first major publication to point this out, with a very thoughtful article called "Easy Money" (11/27/06).

Decades ago, helping the poor was about charity. Then, about 35 years ago, came the bright idea that loans could help the poor start businesses, and the businesses could allow people to pay back the loans and to work their way out of poverty - in a dignified and sustainable way. At first, many observers were repelled by the idea of asking disenfranchised people to repay the small sums they borrowed, at what seemed like very high interest rates. But the idea caught on - slowly at first, and then very rapidly over the last decade. Finally, 2005 was declared by the UN to be the "Year of Microcredit" and in 2006 the Nobel Peace Prize went to microfinance pioneer Muhammad Yunus. Today, nearly everyone seems to be keen on microfinance.

The problem is, microfinance is not a panacea. It can help a great deal in certain situations, but it can hurt in others. Take the example of a woman in rural India who operates a small produce stand, and who cannot afford to buy enough inventory to expand her business or to buy at bulk prices. She can benefit from a loan because it will directly contribute to her revenues and profit margin.

On the other hand, take the example of a woman who is struggling to afford school fees for her children, or medicine for her baby; she needs the money, but how will she pay it back? Also, some microcredit programs have adopted "client retention" as an organizational goal, and are pushing borrowers to come back for more and larger loans - potentially trapping them in a cycle of debt while promising a way out of poverty.

Microcredit can be a powerful tool, under the right circumstances, but a blind push for more and more of it is dangerous. Even more worrisome, perhaps, is that when the microcredit bubble bursts, its supporters will be disappointed and disillusioned. Will they be less likely to pin their hopes on other idealistic plans in the future?

There are plenty of good (yet imperfect) ideas for helping to end world poverty. They all need people who believe in them. We need to use the tool of microcredit wisely, so that it can bring as many people as possible out of poverty, trap as few people as possible in debt, and inspire as many supporters as possible so that they can find more good ideas in the future.