This blog will cover some news items related to Sustainability: Corporate Social Responsibility, Stewardship, Environmental management, etc.


Walmart leads way in going green: "Five years from now being green should not be that big of a deal," said Joseph Nevin, senior principal of Bergmeyer Associates. "It's the way it should be."

Thanks to Susan

Wal-Mart leads the way in going green
By Gail Appleson
Ron Mennemeier, furniture department manager at the Wenztville Wal-Mart Supercenter , wires together a freshly made "super sandwich bale" which are bundles of materials used by the store such as used plastic hangers, plastic cups, aluminium cans, plasic bags, that are sandwiched between pieces of cardboard. These items are now recycled rather than thrown into the trash.
(Laurie Skrivan/P-D)


Green is the new black when it comes to what's in fashion among retailers attending their biggest trade show of the year.

Going green was a key topic at the National Retail Federation's annual convention that ended Wednesday in New York City. Not only did Wal-Mart, Kohl's, Best Buy and other retailers make presentations about their efforts, but for the first time the meeting's huge exposition center held a "Green Pavilion" of vendors showing everything from gift cards made from recycled plastic to energy-saving cash registers.

Also, a group of retailers calling themselves the Sustainable Retail Consortium had its initial meeting here Wednesday.

"Green is not a trend, it's a new way of life for us," Dan Butler, NRF vice president of merchandising and retail operations, said. "Going green is not going to go away."

Retailers know that there is a growing interest among consumers not only about buying environmentally friendly products but shopping at stores that have "green" policies that govern the merchandise they sell as well as how they operate their own businesses, he said.

"One of the things of

increasing importance for all businesses is managing their reputations," said James Fisher, marketing professor at St. Louis University's John Cook School of Business. "Companies have to be more vigilant. They have to be ahead of the next trend. That's what they are doing here. I see it in the context of the bigger picture of corporate governance and corporate responsibility."

Businesses are being held to a higher standard and particularly retailers because "they are in our everyday encounters," Fisher said.

Wal-Mart Stores Inc.'s image, for example, has been battered by criticism of the salaries and benefits it pays workers along with its long-standing battle against unions.

However, over the last two years it has emerged as a leader among retailers for adopting ambitious "green" policies that govern a wide number of areas. These range from the products it carries, where they come from and how they are made and packaged to energy-saving and waste-reducing efforts within its stores.

"Wal-Mart is definitely doing a lot of things that are different and they are a huge leader," Butler said. "What they are doing could have a huge impact on the entire industry."

Indeed, retailers and suppliers filled an NRF "super session" on "Environmental Sustainability at Wal-Mart" on Tuesday.

During the session, Leslie Dach, Wal-Mart executive vice president of corporate affairs and government relations, discussed the lessons the giant retailer had learned and urged other retailers to join its efforts. These changes don't have to cost customers more, they can save them money and they also may help a retailer's bottom line, he said.

Wal-Mart realizes that its core customers don't have the "luxury" of choosing between a value-priced item and a more expensive product that's good for the environment. So it is trying to offer inexpensive products that are Earth-friendly, Dach said.

For example, Wal-Mart plans to sell only concentrated liquid laundry detergent and is in the process of phasing out larger jugs. The conversion is to be completed by May. The smaller bottles are made with less plastic, use less packaging material and less fuel for transport.

For consumers, it is more economical and easier to carry.

Wal-Mart hopes this effort will move the entire industry toward smaller bottles, Dach said.

Among other efforts is the company's work with vendors to reduce paper packaging and eliminate waste. For example, it is aiming to develop "Extended Roll Life" products that condense several rolls of toilet paper or paper towels onto one roll. This reduces the amount of plastic wrapping and cardboard roll cores. It also means more of these products can fit on trucks, thus reducing fuel consumption.

Wal-Mart also offers incentives to its employees to sell and promote environmentally friendly products. In the St. Louis area, the Wentzville Supercenter won a regional award from Wal-Mart last year for best sales of certain Earth-friendly products.

Other retailers agreed that "green" efforts are not only the right thing to do, but they will pay off in the long run due to customer approval and loyalty.

L.L. Bean, for example, has been expanding its bricks and mortar operations and opened three stores last year with a new prototype using energy- and water-saving technologies and recycled materials such as rubber flooring and fixtures made of reclaimed pickle barrels and barn board.

Ken Kacere, senior vice president of retail for L.L. Bean, said during a convention presentation that the company's customers want to see and understand what L.L. Bean is doing in the stores and to be part of the experience.

"The more you can bring it to life to them, the more it resonates with them," he said. The new stores, located in the Northeast, are being well-received by customers and L.L. Bean expects significant sales growth.

"Five years from now being green should not be that big of a deal," said Joseph Nevin, senior principal of Bergmeyer Associates. His firm designed the new L.L. Bean Earth-friendly prototype. "It's the way it should be." | 314-340-8331


[NMSEA-news] Tackling Climate Change report from the American Solar Energy Society: The report illustrates how energy efficiency measures could keep U.S. carbon emissions roughly constant over the next 23 years as the economy grows

Thanks to Angel for the link

> ------------------------------------------------------------------------
> *E-News Alert *
> *ASES Releases Landmark Report - */Tackling Climate Change in the
> U.S.: Potential Carbon Emissions Reductions from Energy Efficiency and
> Renewable Energy by 2030/
> The result of more than a year of study, the report illustrates how
> energy efficiency and renewable energy technologies can provide the
> emissions reductions required to address global warming.
> To develop the report, ASES recruited a volunteer team of top energy
> experts. These experts produced a series of nine papers that examined
> how energy efficiency and renewable energy technologies can reduce
> U.S. carbon dioxide emissions~the main cause of global warming.
> ASES collected the nine papers together and added an overview of the
> studies to create the report. It covers energy efficiency in
> buildings, transportation, and industry, as well as six renewable
> energy technologies: concentrating solar power, photovoltaics, wind
> power, biomass, biofuels, and geothermal power. The results indicate
> that these technologies can displace approximately 1.2 billion tons of
> carbon emissions annually by the year 2030~the magnitude of reduction
> that scientists believe is necessary to prevent the most dangerous
> consequences of climate change.
> The report, edited by Chuck Kutscher, illustrates how energy
> efficiency measures could keep U.S. carbon emissions roughly constant
> over the next 23 years as the economy grows, and how renewable energy
> technologies could make deep cuts below today‚s emissions. Wind energy
> provides about 35% of the renewable energy contribution, while the
> rest is divided about evenly among the other technologies. „Energy
> efficiency and renewable energy technologies can begin to be deployed
> on a large scale today to help save us from the worst consequences of
> global warming,‰ said Kutscher. „With continued R&D to lower costs and
> a reasonable level of policy support, they have the potential to meet
> most, if not all, of the carbon reductions that will be required in
> the future."
> The report is available as a free download at
> <>
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Exhibit 1: How to make a misleading headline

He has a point, but tar sands extraction is environmentally damaging and carbon intensive, which is why it was too expensive to process until recently. Stelmach might not like the answer to "a fair view of the overall greenhouse gas emissions", if we can ever get one. It would probably suggest the best option is no petrol at all.


Alberta premier says fuel-emission curbs could harm energy security (01/16/2008)

Ben Geman, E&ENews PM senior reporter

Alberta Premier Ed Stelmach warned the United States to avoid climate initiatives that could impair U.S. access to Canada's oil sands production and called for new U.S. efforts to support increased oil-sands development.

Climate Change: Taking stock of Industrial Emissions -- An E&E Special Report

Stelmach said oil sands are key to U.S. energy security and his province is taking steps to ensure they are developed with strong environmental protections. But climate initiatives such as California's low-carbon fuel standard, he said, could affect such efforts at a time when Asian markets are "clamoring" for oil.

"If it is not designed to focus environmentally-friendly investment at the point of production, it will penalize energy imports from Alberta, and encourage energy imports from less stable but perhaps less environmentally [responsible] producers offshore," he said in a Washington speech.

The notion of a low-carbon fuels standard has also attracted attention at the federal level. It is included in a major Senate global warming bill approved by the Environment and Public Works Committee last month.

Stelmach told reporters that emission standards should take a fair view of the overall greenhouse gas emissions associated with fuels. "My concern would be how those are calculated," he said.

"In terms of the overall emissions, if you develop the oil conventionally in, say the Middle East, how much energy is required to bring it to the United States" must be considered, Stelmach added, urging focus on cumulative greenhouse gas emissions.

Canada is already the largest supplier of oil to the United States. And Stelmach said he would like to see exports from oil-rich Alberta to the U.S. increase. "All of the economics are in place for that to happen," he said.

But he called for several steps the United States could take to support increased oil sands production, including "expediting pipeline regulations," and "providing access to markets for refined products," as well as greater labor force "mobility" and increased cooperation on enhancing the environmental sustainability of the oil sands.

Stelmach and other provincial officials are in Washington for several days of meetings on trade and investment in the country's farming and energy sector. He made his remarks at an energy forum hosted by an Alberta business group in a Senate office building.

Royalties at issue

Stelmach's remarks come roughly three months after he announced plans to increase royalties on oil, natural gas and oil sands beginning next year.

In announcing the changes in late October, Stelmach declined to grandfather existing royalty agreements with Suncor and Syncrude Canada Ltd., the top two oil sands producers, that expire in 2016. Instead, he said provincial government would work out a "transition agreement" over three months.

Stelmach told reporters today that discussions are progressing well and the "nuts and bolts" of the agreement will be in place but said the final touches may not be in place by the end of this month. "The ratification may not happen by the end of January," he said.

Current oil sands production is roughly 1.25 million barrels per day and are forecast to nearly triple by 2016, he said. Stelmach said that since 2000, more than $52 billion has been invested in 81 projects that are currently producing.

Environmental groups are using Stelmach's visit to call attention to the environmental effects of oil sands development, citing concerns about greenhouse gases and harm to forest areas.

"Oil from the tar sands is about our energy past, not our future. Political and business leaders who want to fight global warming should be concerned about expanding U.S. imports of tar sands fuel," said Liz Barratt-Brown, an attorney with the Natural Resources Defense Council, in a statement today.

But Stelmach outlined a host of steps he said are being taken to address climate and other concerns, such as requiring oil sands facilities to curb the greenhouse gas "intensity."

The Responsibility Paradox: the notion of corporate social responsibility (CSR) has not changed much over the years. As a result, just as stakeholders are holding corporations more responsible for their actions, corporations understand their responsibilities to stakeholders even less. The European Union will set the tone for product and environmental regulations, the United States will lead on governance guidelines, and international NGOs will drive human rights and labor laws.

Thanks to Sarah for this great link

The Responsibility Paradox

With operations scattered around the globe, the modern corporation is a different animal from its predecessors. Yet the notion of corporate social responsibility (CSR) has not changed much over the years. As a result, just as stakeholders are holding corporations more responsible for their actions, corporations understand their responsibilities to stakeholders even less. To resolve this paradox, firms must update their CSR practices. The authors predict that the European Union will set the tone for product and environmental regulations, the United States will lead on governance guidelines, and international NGOs will drive human rights and labor laws.

By Gerald F. Davis, Marina V.N. Whitman, and Mayer N. Zald
 Winter 2008   1 comments | Comment on this article

In Early 2007, thousands of cats and dogs in North America fell ill with kidney ailments. Many of the pets had dined chez Menu Foods Inc., a company in Ontario, Canada, that manufactures pet foods for more than 100 brands, including Procter & Gamble, Iams, Colgate-Palmolive's Science Diet, and Wal-Mart's Ol' Roy. By mid-April, investigators had traced the animals' illnesses to melamine, an industrial chemical that tainted a few of Menu Foods' raw ingredients. They then followed the thread to two suppliers in China, which had spiked the ingredients to cut costs and boost profits.

So where should the public point its finger? Procter & Gamble, Colgate-Palmolive, Wal-Mart, and the many other corporations that own the pet food brands? Menu Foods, which mixed the kibble? The Chinese manufacturers, which adulterated the ingredients? The U.S. Food and Drug Administration, which failed to detect anything amiss? The stores that didn't remove the foods from the shelves, even after Menu Foods recalled them?

Traditional notions of corporate social responsibility say that companies are beholden to the communities in which they are located. But globalization has made it difficult to discern exactly which communities to include. With far-flung value chains, decentralized governance, and churning employees, multinational corporations have become what British journalist Martin Wolf calls "rootless cosmopolitans."

Before it went private in 2006, for example, Tommy Hilfiger had its corporate headquarters in Hong Kong, its legal incorporation in the British Virgin Islands, its shares on the New York Stock Exchange, its annual meeting in Bermuda, and most of its manufacturing in Mexico and Asia.1 Likewise, Royal Caribbean International has its headquarters in Miami; registers its ships in the Bahamas, Malta, and Ecuador; and is legally incorporated in Liberia, where it is subject to neither Liberian nor U.S. income taxes. The Liberian corporate registry, in turn, is a business housed in a nondescript office park near Washington Dulles International Airport in suburban Virginia.

What does Tommy Hilfiger owe to Hong Kong, Bermuda, New York, and Mexico – not to mention to the countless malls where its goods are sold? What are Royal Caribbean's responsibilities to Liberia, which few of its executives could locate on a map?

Although firms have changed drastically with globalization, their understandings of corporate social responsibility have not kept pace. This presents corporations with a paradox: At a time when more stakeholders than ever are calling them to account, firms have but a foggy notion of what, exactly, their obligations are.

We propose an updated notion of corporate social responsibility – global corporate social responsibility – that reflects the fact that people hold firms responsible for actions far beyond their boundaries, including the actions of suppliers, distributors, alliance partners, and even sovereign nations. Our research suggests that the standards for global CSR will be just as international as corporations themselves: the European Union will set the tone for product and environmental standards, the United States will largely shape governance guidelines, and international nongovernmental organizations (NGOs) will drive human rights and labor rules.

The Firm Evolves

The multinational corporation of the 21st century bears little resemblance to its forebears. In the 1950s and 1960s, U.S.- based corporations aimed for continuous growth in revenues and employment, which they often brought about through mergers and acquisitions. Employees of large American firms viewed their jobs as lifetime commitments, with regular raises and generous benefits upon retirement. Most large corporations had widely dispersed ownership, and so shareholders – mostly individuals – were relatively powerless.

By the early 1980s, however, two sets of changes eroded the sharp separation of corporate ownership and control that had characterized American-style capitalism for at least half a century. First, individuals began putting their savings into mutual funds rather than into savings accounts. Consequently, institutional investors began replacing individual investors as the direct owners of the nation's largest public companies. As institutional investors increased their ownership of corporate America, they exercised their new power by wringing better performance from companies – particularly the poorly performing manufacturing behemoths that had been assembled over the previous two decades.

Second, the Reagan administration relaxed its antitrust standards, and several court decisions facilitated hostile takeovers. As a result, a wave of buyouts and takeovers dissolved many of the conglomerates that had started the decade.2To cut costs, corporations focused on a narrower range of activities, outsourcing and off-shoring many of their processes. And it wasn't only the rank-and-file employees who saw their jobs go to temporary employees and contract business services: Executives also received pink slips when their companies' earnings disappointed or stock prices sagged.3

Meanwhile, globalization, international economic deregulation, and new information and communications technologies intensified competition between corporations. American firms watched their profit margins decline decade by decade from the 1950s to the 1990s. To cut costs and increase profits, corporations amped up their outsourcing and downsizing throughout the '90s, aided by technological advances. Firms like General Motors and Ford, which once viewed their vertical integration as a source of strength, spun off new companies to manufacture their parts and components, thereby unburdening themselves of costly union labor. Following a model pioneered by Nike, companies like Sara Lee sold off nearly all their manufacturing plants and became, in essence, "virtual" manufacturers, taking charge of design, marketing, and distribution but outsourcing the actual manufacturing to suppliers. Indeed, by the turn of the century, a number of large "manufacturing" firms were in fact manufacturing nothing at all.

At the same time, the actual manufacturers began handling production for many different companies. Ingram Micro, for instance, assembled personal computers for four of the five largest PC manufacturers on the same assembly lines in the 1990s. And the Canadian factory responsible for the tainted pet food of summer 2007 was cooking kibble for more than 100 brands.

Well into the 21st century, corporations continue adding more links to their supply chains, stretching ever farther across the globe for cheaper materials and labor. Consequently, consumers can no longer unambiguously define a car as "American" or a tool as "Japanese" when their raw materials, production, and assembly often take place in several different countries. Indeed, by 2003, nearly half of the United States' total imports reflected transactions between different parts of a single firm rather than arm's-length sales to final consumers, according to the A.T. Kearney/Foreign Policy Globalization Index.

Corporations Take Responsibility

This blurring of corporations' institutional and national boundaries has complicated the question of what their responsibilities are. Is the corporation simply a nexus of contracts, with "no soul to damn, no body to kick," as Baron Thurlow, lord chancellor of England in the late 18th century, is quoted as saying, 4 and therefore responsible only to its shareholders? Or is the modern multinational corporation, with its global reach in both production and sales, a social being with responsibilities to all its stakeholders – employees, customers, shareholders, creditors, suppliers, communities, even society as a whole? And if so, what are the scope and limits of these responsibilities?

History has favored the latter interpretation. Corporate social responsibility – meaning the voluntary actions a corporation takes to improve the lot of its various stakeholders – is a relatively recent term. But firms have practiced CSR almost from the beginning of the industrial revolution. In the late 18th century, for example, factory owners had to provide both physical and social infrastructure – everything from roads, canals, and housing to worker education and health care – to support large-scale manufacturing.

Well into the late 19th century, owners still provided housing and community services, both out of beneficence and out of the desire to control and discipline their workers. As noted by one observer of Pullman, Ill., the company town created for workers who manufactured Pullman railroad cars: "It is benevolent, well-wishing feudalism, which desires the happiness of the people, but in such way as shall please the authorities."5 (In 1894, "pleasing the authorities" apparently fell out of favor when Pullman became the site of one of the most brutal labor disputes in U.S. history.) Company towns still feature prominently in some developing economies. For example, the Tata conglomerate in India continues to operate the town of Jamshedpur on behalf of its steel manufacturing facility.

The great fortunes created in the late 19th and early 20th centuries inspired CSR that went beyond the communities where corporations were located. Andrew Carnegie, for instance, funded public libraries across the country, far from the origins of his steel fortune. Carnegie also started TIAA, which became the major vehicle for academic faculty pension support in the United States.

By the early part of the 20th century, corporate-sponsored welfare capitalism provided employees with health care, pensions, and many other services Europeans would increasingly consider to be the province of the state. During the post-World War II era, however, Americans began to debate how much responsibility corporations should assume beyond their own boundaries. On the one hand, as the Michigan Supreme Court's decision in Dodge v. Ford Motor Company in 1919 plainly stated, corporations could not justify expenditures for anything other than improving profits: "A business corporation is organized and carried on primarily for the profit of the stockholders. The powers of the directors are to be employed for that end."

On the other hand, commentators such as economist Carl Kaysen noted that the modern corporation is "the single strongest social force shaping its career members," and that it should strive to be "soulful."6 "No longer the agent of proprietorship seeking to maximize return on investment," Kaysen wrote of the soulful corporation, "management sees itself as responsible to stockholders, employees, customers, the general public, and, perhaps most important, the firm itself as an institution."

The Three Sectors Collide

While corporate executives debated how much social responsibility they should voluntarily assume, the U.S. federal government – often at the urging of domestic NGOs – began codifying what had been the corporation's spontaneous beneficence. Thus the three sectors began their delicate dance over which obligations corporations must fulfill and which they can ignore. For instance, the Equal Employment Opportunity Act of 1972, the Occupational Safety and Health Act of 1970, and the establishment of the Environmental Protection Agency in 1970 aimed to reduce discrimination on the job, to create safer products and workplaces, and to improve environmental quality.

As production and markets shipped overseas, so too did efforts to hold corporations accountable for their actions. NGOs went international, and international lawmaking bodies went into the business of regulating business. In 1977, for example, European NGOs banded together to protest Nestlé's marketing of infant formula to low-income nations of the global south. The Infant Formula Action Coalition (INFACT) argued that Nestlé's marketing efforts were unethical: Mother's milk is more healthful than formula, and consumers often used unclean or too much water to mix the formula, resulting in disease and malnutrition for their infants. Nestlé's inaction in response to INFACT prompted the latter to call for an international boycott of Nestlé. By 1981, the boycott had resulted in U.S. Senate hearings and the development of a UNICEF/World Health Organization code that prohibited the advertising, promotion, and provision of samples of infant formula. The boycott ended in 1984, when Nestlé agreed to abide by the new code. The Nestlé boycott became a model for subsequent global consumer boycotts.

In the 1990s, international NGOs and lawmaking bodies began holding corporations responsible not only for their own behavior, but also for the behavior of their suppliers. Nike was one of the first corporations to discover that its legal boundaries no longer set the limits of its responsibilities. In a highly publicized campaign, a number of NGOs alleged that the apparel giant's suppliers in Southeast Asia violated labor rights. More recently, several plaintiff groups have used the Alien Tort Claims Act to sue American firms in American courts for allegedly helping foreign governments violate human rights. The case against Unocal in Myanmar was settled out of court, and the case against ExxonMobil in Nigeria is still in litigation (see "Getting Human Rights Right" on p. 54 for more on these cases).

To stave off further outside regulation, a growing number of American firms are attempting to regulate themselves. As early as 1972, when GM published its first public interest report, corporations began to study and report on their own practices. By 2005, 52 percent of the Fortune Global 250 firms produced corporate responsibility reports. And the growing demand for third-party monitoring has ushered in a long and growing list of monitoring organizations and processes. Some of these monitoring efforts are partnerships between firms, NGOs, and, in some cases, governments. Others fall strictly under the control of one group, often creating mutual antagonism and suspicion.

But figuring out how to deal with the expanding boundaries of corporate social responsibility remains very much a work in progress. Our research gives some hints on whence corporations should take their cues. Traditionally, corporations have followed the standards set by local and national regulators and stakeholder groups. But successful multinational corporations will soon have to look beyond national boundaries to discover which standards to follow, and perhaps to exceed.

Europe Pushes Product Safety

When it comes to product safety and environmental standards, corporations should look to the European Union for the shape of things to come. With the recent addition of 10 new members, the European Union's 25 nations together constitute the world's largest market – surpassing the United States. Non-E.U. companies that compete in the global marketplace, or hope to do so, must therefore design and manufacture their products to conform to E.U. requirements. This is because customizing products to meet different rules and standards in different countries vastly increases complexity and expense.

Because the European Union's environmental and product safety standards tend to be the strictest, the race for lowest production costs will ironically spur the adoption of more responsible processes and products. In the past, firms often chased the lowest-cost labor forces housed in the most lax regulatory environments, thus inducing states to provide a docile labor force and to turn a blind eye to pollution. But the European Union strongly abides by the precautionary principle, which holds that, in cases where the likelihood of harm is unknown, rules and standards should err on the side of caution.

The European Union's precautionary principle has not always prevailed in cases brought before the World Trade Organization. But its success in creating de facto global law is impressive. As Jeffrey Immelt, CEO of General Electric, put it: "Europe in many ways is the global regulatory superpower. It can speak with one voice and a degree of certainty."7

For example, the European Union's 2006 ban on lead, cadmium, and mercury in electronic products is forcing the electronics industry to eradicate these heavy metals from their supply chains, affecting thousands of firms around the world. Similarly, European cradle-to-grave standards, which require producers to recycle their own products, led U.S.-based Dell to design more easily disassembled computers. Dell now also offers free computer pickup and recycling in both the European Union and the United States.

Perhaps the greatest impact of the European Union's precautionary principle is on farmers, primarily but not exclusively American, who grow genetically modified crops. The European Union has stringent restrictions on genetically altered foods. Fearing marketing problems in the European Union, multinational food processors increasingly refuse to buy genetically modified crops. The global reach of such decisions is broad: Food-scarce African nations allegedly avoid planting higher-yield genetically modified seeds because they fear that they cannot export the resulting crops to E.U. countries.

European pressures also influence the processes involved in international commerce. For instance, over the past few years, some 200 U.S. companies, including Microsoft, have signed agreements to abide by E.U. Internet privacy rules. These rules affect the transfer and use of online data, and thus virtually every firm that has workers, suppliers, or customers within the European Union.

The European Union has also raised environmental standards. When the United States announced that it would not ratify the Kyoto Protocol in 2002, the European Union built a consensus among enough countries to ratify the treaty. As a result, companies are adopting the protocol's standards, even though the United States did not sign it. In fact, though, most E.U. countries are not meeting their emissions-reduction benchmarks. This failure has led its critics to argue that the overall goals set for 2012 are unlikely to be met. Furthermore, they note that as long as such large, fast-growing countries as China and India are under no similar obligations, even successful progress toward the protocol's targets would not prevent a substantial increase in global CO2 emissions. More generally, critics of the European Union's strict product standards argue that, in a number of cases, they are unnecessarily costly and without scientific basis.

The United States Guides Governance

Although product and environmental regulations will reflect European standards, corporate governance will reflect an American-style orientation to transparency, consistent profitability, and shareholder protection. When companies list their shares in the United States, they must meet all the rules of the market on which they are listed, as well as U.S. securities regulations. Because the quest for capital and industry dominance is leading global corporations to list their shares in the United States, American standards have become international standards for capital markets.

By 2005, all but two of the world's 25 largest corporations were listed on the New York Stock Exchange (the exceptions are Germany's Volkswagen and France's Carrefour). Indeed, more foreign firms were listed on U.S. markets than German firms were listed on the Deutsche Börse. Although anecdotal evidence says that the Sarbanes-Oxley Act's rigorous demands may have slowed this process, and may even lead some foreign firms to delist, so far there has been more grumbling than action, and relatively few firms have defected.

The consequences of not complying with American securities rules and regulations can be dire. For example, in 2004, the Royal Dutch/Shell Group paid the U.S. Securities and Exchange Commission (SEC) $120 million in penalties to settle charges that the firm had inflated its reported oil reserves. And then in 2006, the owner and top executive of Mexico's U.S.-traded TV Azteca paid $7.5 million to settle fraud charges. In both cases, the SEC was far more aggressive than home-country regulators in its pursuit of fraud charges.

At the same time, foreign funders are pressing other industrialized nations to pay more attention to governance, accountability, and profitability. By 2000, for example, Americans owned roughly $1 trillion in European equities. Institutions such as TIAA-CREF and Fidelity used their new clout to intervene in matters traditionally left to management. TIAA-CREF, for instance, stepped in to prevent Telecom Italia's plan to spin off its wireless unit, and Fidelity publicly opposed the same firm's proposed merger with Olivetti.

In addition, foreign pension funds, mutual funds, and other intermediaries have begun to emulate the shareholder activism of their American counterparts. For example, Jang Ha Sung, the dean of the Korea University business school, has sought to improve the governance of opaque, family-dominated South Korean firms for more than a decade. His group, People's Solidarity for Participatory Democracy, convinced SK Telecom to create an independent audit committee and Samsung Electronics to make its accounting more transparent. Through his current work with Lazard's $280 million Korea Cor porate Governance Fund, he hopes to reduce the "Korea discount" – the undervaluation of Korean stocks relative to those in other Asian nations, which Jang attributes to poor corporate governance.

One result of the global spread of profitability pressures is that the American boardroom revolution of the 1990s appears to be going global. A study of the world's 2,500 largest listed companies by the consulting firm Booz Allen Hamilton revealed that the number of chief executives dismissed worldwide rose significantly in 2002, increasing from 2.3 percent in 2001 to 3.9 percent in 2002, as compared with only 1 percent in 1995. Board and shareholder impatience with poor financial performance underlay these dismissals: Companies that dismissed their CEOs generated 6.2 percentage points lower total shareholder returns than did companies whose CEOs retired voluntarily.

Shareholder-oriented governance can bring its own issues. The corporate scandals that inspired Sarbanes-Oxley, and the more recent imbroglios about stock options at dozens of U.S. companies, show that commitment to shareholder value can have unintended consequences. Moreover, emphasis on shareholder value sometimes translates into a short-term orientation that puts companies at odds with other emerging global standards. This is yet another reason why both firms and financial analysts should shift their focus toward longer-term viability and profitability.

NGOs Head Human Rights

As globalization increases, international and indigenous NGOs are developing their presences in low-income countries and demanding changes in corporate policies. These demands can not only disrupt local production, but also sully the reputations of corporations in their home countries. For example, in the early 1990s, the Ogoni people of Nigeria began a series of protests against Shell and Nigerian National Petroleum. Shell's environmental impact on the Ogoni, coupled with its lack of economic impact, prompted large-scale protests at Shell facilities in 1993. In response, the Nigerian military destroyed more than three dozen villages and executed nine Ogoni protest leaders. Global social movements supported the Ogoni by launching an international boycott and a shareholder campaign against the oil giant.8

A number of NGOs and freelance activists have also mounted an international antiglobalization movement. Believing that transnational trade agreements benefit multinational corporations to the detriment of ordinary working people, the poor, and the environment, these activists kicked off the antiglobalization movement in 2000 with their disruptive demonstrations against the World Trade Organization meeting in Seattle. Since that time, they have regularly protested other international financial and trade arrangements, including the North American Free Trade Agreement in 2004. Although these protestors seem united in a single global justice movement, they are in fact transient teams of activists from a number of disparate movements. Despite its ragtag origins, the antiglobalization movement has forced global issues onto both corporate and public agendas. For example, NGOs have put pressure on a number of multinational consumer goods producers, beginning with Nike, to take responsibility not only for their own behavior regarding workers' rights, but also for the behavior of their globally dispersed suppliers.

To respond to heightened human rights standards, managers and executives must not only respond in a forthright matter to the complaints of local residents and NGOs; they must also develop a systematic way of thinking about the possible impacts of the corporation on local populations. Some corporations have joined international certifying agencies that measure compliance with voluntary standards. Others are learning on their own – and sometimes the hard way – how to mitigate possible damages from their operations.

Regulation Begets Responsibility

What we now call corporate social responsibility evolved out of practices that companies developed for clear business purposes during industrialization. Contemporary multinational corporations are vastly different from their predecessors, and so are the standards that they are expected to meet. For the future of global CSR, we suggest that corporations look to the European Union for product safety and environmental standards, to the United States for corporate governance guidelines, and to international NGOs for human and labor rights rules.

Critics of the regulation of corporate activities fear that regulation will ultimately undercut the realization of social goals. For example, T.J. Rodgers, CEO of Cypress Semiconductor, responded to the Clinton administration's efforts to induce more corporate good works with an op-ed in The New York Times (April 29, 1997): "When good works cease to be voluntary and become compulsory, charity becomes confiscation and freedom becomes servitude. Philanthropy is a byproduct of wealth, and wealth is best created in free markets whose workings embody a fundamental and true moral principle long forgotten in Washington."

We disagree with Rodgers. Although the literature on CSR supplies plenty of anecdotal evidence of corporate altruism – for example, the oft-repeated story of Merck's development of its river blindness drug (see "Sharing Power" in the fall 2005 issue of the Stanford Social Innovation Review) – our research shows that regulation is the surer path to soulful corporate behavior. Using KLD Research & Analytics' annual ratings of several hundred public corporations, we find the following patterns: 1) the corporations most engaged with their communities, particularly through corporate philanthropy, are financial institutions whose contributions are effectively mandated by the Community Reinvestment Act of 1977; 2) corporations with the best environmental records, which include petroleum refining, primary metals, rubber and plastic, and utilities, are those with the most contact with the Environmental Protection Agency; and 3) the industries with the best employment practices, which include metal extraction, airlines, petroleum refining, and transportation, are among the most heavily unionized.

This suggests that if we want multinationals to exceed standards of responsible behavior, then we need to understand how and where those standards are defined. It also means that, in the absence of such standards – regulation and other forms of organized social pressures – multinationals are unlikely to adopt best practices. The paradox of responsibility may paralyze them, rather than move them to action.

CSR has been a contested concept, as many have argued that the responsibility of the corporation is solely to make a profit. Now and in the future, however, management that ignores its social responsibilities will always be behind the curve.

The authors thank the Center for Advancing Research and Solutions for Society at the University of Michigan for supporting this research.

1 Gerald F. Davis and Mayer N. Zald. "Social Change, Social Theory, and the Convergence of Movements and Organizations." Social Movements and Organization Theory, Gerald F. Davis, Doug McAdam, W. Richard Scott, and Mayer N. Zald, eds. (New York: Cambridge University Press, 2005): 335-350. 2 Gerald F. Davis, Kristina A. Diekmann, and Catherine H. Tinsley. "The Decline and Fall of the Conglomerate Firm in the 1980s: The Deinstitutionalization of an Organizational Form." American Sociological Review 59 (1994): 547-570. 3 Marina v.N. Whitman. New World, New Rules: The Changing Role of the American Corporation. Boston: Harvard Business School Press, 1999. 4 John C. Coffee Jr. "No Soul to Damn, No Body to Kick: An Unscandalized Inquiry into the Problem of Corporate Punishment." Michigan Law Review 79 (1981): 386-459. 5 Richard Ely. "Pullman: A Social Study." Harper's Magazine 70 (1885): 452-466. 6 Carl Kaysen. "The Social Significance of the Modern Corporation." American Economic Review 47 (1957): 311-319. 7 Marc Gunther. "Cops of the Global Village." Fortune ( June 27, 2005): 158-162. 8 Andrew Van Alstyne. "Global Social Movements and Global Corporate Social Responsibility." Unpublished Sociology Department paper, University of Michigan, 2005.

GERALD F. DAVIS is the Wilbur K. Pierpont Collegiate Professor of Management at the Ross School of Business and a professor of sociology at the University of Michigan. His work focuses on corporate governance and the social impact of financial markets.

MARINA V.N. WHITMAN is a professor of business administration and public policy at the University of Michigan. Her research focuses on international trade, investment, and corporate governance. She has also served as a member of the Council of Economic Advisers, a group vice president of General Motors, and an independent director of several leading multinational corporations.

MAYER N. ZALD is a professor emeritus of sociology, social work, and management at the University of Michigan. He has written extensively on organizations and social movements.

Alcoa, Shell, 52 Others Named Founding Reporters Of Climate Registry

Thanks to Erwin for this one

FYI, 52 potential carbon management opportunities ... .....?

Alcoa, Shell, 52 Others Named Founding Reporters Of Climate Registry

Fifty-four organizations, some governmental, have been named Founding Reporters of the The Climate Registry.  As Founding Reporters, they have voluntarily pledged to measure, independently verify and publicly report their GHG emissions.

The Climate Registry was established by thirty-nine U.S. States, five Canadian provinces, three Native American tribes, two Mexican states and the District of Columbia.  The registry was begun last year with an agreement among five states.  Soon after, 31 states came aboard as charter members. .

The fifty four  Founding Reporter organizations are as follows:  Alcoa; Alliant Environmental, LLC; Appliance Recycling Centers of America; Arizona Public Service Company; Austin Energy; Bentley Prince Street; Cameron-Cole, LLC; City of Austin, Texas; City of Roseville, California; City of Seattle,Washington; Cormetech, Inc; Coastal Conservation League; Covanta Energy Corp; Duke Energy Corporation; Earth Advantage, Inc; Ecos Consulting; EcoSecurities; ETC Group, LLC; First Environment; Great River Energy; Innovative Bio-Technologies, LLC; Jacques Whitford Limited; Kennecott Land Company; Kennecott Utah Copper; Kleinfelder, Inc; Los Alamos National Lab; Minnesota Metropolitan Council; Minnesota Pollution Control Agency; MotivEarth, LLC; National Grid; Newmont Nevada Energy Investment, LLC; PacifiCorp; PG&E; PPG Industries, Inc; SAIC Environmental Consultants; Salt Lake City Corporation; Salt Lake County, Utah; Shell Oil Company; South Carolina Department of Health & Environmental Control; Salt River Project; SWCA; Symbiotic Engineering, LLC; The City of Greenville, South Carolina; The City of Long Beach, California; The City of Wilmington, Delaware; The North Carolina Department of Environment and Natural Resources; The U.S. Postal Service; TRC Solutions, Inc; Trihydro Corporation; Tropical Salvage, Inc.; USANA Health Sciences; Utah Department of Environmental Quality; Wolverine Power Cooperative; Worldwide Carbon, Inc; Xcel Energy.

IT Can Take the Lead With CSR, According to Report : "Sustainable IT Provision: Meeting the Challenge of Corporate, Social, and Environmental Responsibility" looks at why its important for anyone in the IT field to be concerned about environmental issues and what challenges they are facing.

IT Can Take the Lead With CSR, According to Report

OAKLAND, Calif., Jan. 17, 2008 -- The IT industry has to be more proactive with social and environmental issues, according to a new report that also explains what the industry can do to be more environmentally-friendly.

"Sustainable IT Provision: Meeting the Challenge of Corporate, Social, and Environmental Responsibility" looks at why its important for anyone in the IT field to be concerned about environmental issues and what challenges they are facing.

The report touches on how being environmentally-friendly is beneficial for IT, how to develop a long-term and sustainable strategy, what technologies and methods are most efficient, and case studies looking at proven initiatives.

Beyond such basic points as turning equipment off when it's not in use and maximizing use of power management, the report goes into consolidation, virtualization, re-engineering of data centers and fresh air cooling.

"Sustainable IT Provision" was prepared by Butler Group, a European IT research and advisory firm.

HBR: Green Business: Give us your Feedback

Thanks to Julie for this find
HARVARD BUSINESS REVIEW - Green Business: Give Us Your feedback. View this on your Mobile device.

Green Business: Give us your Feedback

On January 23, Harvard Business Review will be launching, an expert-led discussion exploring what's working in green business strategy.

As we prepare to launch, we have developed a BRIEF survey to help us understand the perspective of you, our readers, on this topic. The survey can be found at the following link:

Take the survey.

To thank you for your participation, a free copy of the article, "Competitive Advantage on a Warming Planet" will be available for download immediately after completing the survey.

Thank you in advance for your participation.
Harvard Business School Publishing Market Research

If you require immediate assistance, please email

If you would prefer not to be contacted for this study or future research studies,
click here.

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Study: 86% Of Americans Involved In ‘Green’ Activities

January 15, 2008
Study: 86% Of Americans Involved In 'Green' Activities

study-86-of-americans-involved-in-green-activities.jpegMore than 84 percent of respondents to a new study believe "it is a moral obligation" to care for the environment and 86 percent already participate in at least one green activity such as conserving energy at home, recycling, driving a fuel efficient car, buying recycled products or picking up litter. However, the research also found that a main barrier to doing more "green" actions is people's trepidation that such activities may associate them with extreme political or environmental viewpoints.

The study, entitled "Moving Consumers from Green Interest to Green Action," was conducted by Insight Research Group in partnership with HGTV and the Natural Resources Defense Council.

Not surprisingly, given the increased media coverage of "green" topics, the study found that 40 percent of consumers say they are more aware of environmental issues now than they were in 2006. In addition, 81 percent of respondents think the current focus on environmental or "green" issues is "here to stay" rather than a "passing fad."

The study found that Americans would be willing to do even more if they understood how a particular "green" action could help the environment as well as benefit them personally - 78 percent said they are "willing to make a lifestyle change for the good of the environment." While many responded that "the best way to solve current environmental problems" is through individuals (72 percent) and businesses (64 percent) taking responsibility, most admit they can't distinguish between the reality and the hype, and report it is hard to know what actions are truly good for the environment.

When asked why they participate in "green" activities, consumers reported the major motivators are that "it's good for the environment" (82 percent), "it helps future generations" (78 percent), "it's healthy" (78 percent), "it's the right thing' to do" (78 percent), and "it fits with my morals or beliefs" (73 percent). Interestingly, Insight Research Group's consumer segmentation, People's Approach to Green and the Environment (PAGE), revealed that consumers who are the most green, "Green Gurus" (17 percent), regularly participate in 4.1 green activities, while the rest of consumers — which includes Conscientious Citizens (24 percent), Guidance Seekers (24 percent) Bystanders (17 percent) and Hype Haters (18 percent) - are not far behind, regularly participating in an average of 2.5 green activities.

Insight says its research methodology consisted of both qualitative and quantitative phases. The initial qualitative research phase included twenty 30-minute phone interviews recruited via RDD (random digit dialing) among consumers of a wide range of ages, professions, regions, political opinions, and environmental attitudes. The phone interviewees also completed a three-day online, interactive debate via blogging based on "green"-focused prompts and questions. The quantitative research phase consisted of a nationally representative online survey with a robust sample recruited via RDD (N = 1000)


IBM, Nokia, Sony and Others Place Eco-Friendly Patents Into Public Domain (and into YouTube): Unrestricted availability of these patents will encourage researchers, entrepreneurs and companies of all sizes in any industry to create, apply, and further develop their consumer or industrial products, processes, and services in a way that will help to protect and respect the environment

Got an interesting email today... I think the fact the email was sent (and has a YouTube link) is almost as interesting as the actual content :-) Thanks to Michael for sending on the info

----- Forwarded by Jean-Francois Barsoum/Markham/IBM on 2008-01-14 16:29 -----


I know you blog about the environment, so I wanted to provide you with information about some great news IBM made today.  IBM and the World Business Council for Sustainable Development are teaming with Nokia, Pitney Bowes, and Sony to offer dozens of innovative, environmentally-responsible patents into the public domain.

Unrestricted availability of these patents will encourage researchers, entrepreneurs and companies of all sizes in any industry to create, apply, and further develop their consumer or industrial products, processes, and services in a way that will help to protect and respect the environment.  Here are some examples of what the IBM patents and patents from others may enable others to do:

- Implement a process that uses ozone to replace harsh chemicals in safely producing TV screens, camera optics, eyeglasses and contact lenses
- Use recyclable and biodegradeable packaging material to better protect delicate items during shipping
- Implement a process to reduce harmful emissions from factories and cars
- Create new electronics products such as clocks, calculators and PDAs from cellphone components

We think this initiative demonstrates a unique stance being taken by IBM and these other organizations to help drive collaborative innovation to solve environmental challenges.  You can see the full press release and access other information through an IBM virtual press kit at .  Images and video are available for download by registered bloggers at . And to view a video highlighting the Eco-Patent Commons and some of the patented innovations IBM has pledged, visit: .