Corporate Social Responsibility (CSR) as Window dressing

CSR is responding to major structural drivers and expectations of investors, employees, NGOs, global media, governments and society at large - stakeholders who will reward companies that "get it right" and punish those who get it wrong.

CSR is relevant to businesses of all sorts and sizes, although global corporations subject to tremendous stakeholder scrutiny and pressure (by NGOs such as Greenpeace and Amnesty International, governments, the global media, international organizations and unions) have taken it up to a greater extent either as a result of various scandals or in order to achieve the various business benefits and proactively maintain their "social license to operate."

notions of CSR were "present at the inception" of the corporation. From the very inception of bodies corporate, such as the Roman societates, through medieval bodies corporate (universities, cities, guilds), and even chartered companies of the age of exploration, and the colonial companies and corporate churches, utilities and charitable entities involved at the founding of the United States of America, corporations have generally had public as well as private purposes (although companies like the British and Dutch East Indies companies also caused great harm).

Corporate culture is the underlying values and norms that tell employees and managers “the way we do things around here.” Although it doesn’t appear on a balance sheet, corporate culture is central to how a company performs. Within every organization there are also different subcultures,  which define day-to-day behaviors and ultimately the performance of business units and corporate functions.

Operating in silos, these subcultures are typically not well understood by each other and therefore often work at cross purposes. It’s this lack of alignment that causes operational failures like the BP oil spill in the Gulf of Mexico or the reception problem following the launch of Apple’s iPhone 4.

Survivors of the Deepwater Horizon drilling rig explosion reportedly said, “it was always understood that you could get fired if you raised safety concerns that might delay drilling.”

What’s incredible is that many leading economists, who spend their days thinking about the mechanics of incentives and self-interest, don’t even seem to know what a conflict of interest is.

the Corporate Social Responsibility Initiative, is sponsored by nefarious corporate abusers like Chevron, Coca-Cola, and Microsoft, as well as Walter Shorenstein, a recently deceased billionaire real estate developer and one of the biggest Democratic donors over the past half-century.

Apache and its founder, Raymond Plank, are major donors to the Center’s Consortium for Energy Policy Research (CEPR) at Harvard, funding its faculty chair, Professor William Hogan.

The Global Reporting Initiative, the European Coalition for Corporate Justice, and the European Trade Union Confederation are making the calls as the Commission closes its consultation on non-financial disclosure by companies. [2] The organizations have each submitted replies to the consultation asking for new regulation to bring non-financial reporting by medium and large companies in line with the needs of contemporary society. Companies’ stakeholders, including directly affected communities and the public at large, need comprehensive and credible information on corporate social and environmental impacts to identify problems with and monitor progress of the companies they deal with.

“Although reporting on sustainability impacts is becoming increasingly commonplace, it is still not a mainstream activity. At the Global Reporting Initiative, we produce guidelines that enable all companies and other organizations to produce comparable reports on their sustainability performance. We are not asking the European Commission to reinvent the wheel, but to look at what many big companies are already doing and create new regulation that requires all large and medium sized companies to be transparent about the impact they are having on the world. Only then can we follow a clear path to a sustainable economy.”

nformation should be based on clear indicators, covering core areas – including human rights, environmental standards and corruption risks. These will allow a company’s performance to be compared with other companies in the sector and allow investors and others to assess the company’s exposure to risk.”

But we had what all families deserve and few today enjoy, which is economic security. The reason was that my parents owned things.

In that time, I watched corporations rewrite the social contract. I saw mass layoffs shift from something companies did in a dire emergency to become ordinary practice. I watched companies I once admired hire union-busting consultants.

At every turn, companies claimed to be acting in the interests of their owners, their shareholders. Ironically, the owners supposedly demanding those acts were us, all of us with investing portfolios holding stock in corporations, all of us who have children attending colleges with endowments, all of us who support churches, museums, and nonprofits that rely on donations paid for from financial holdings.

At human level, the interconnected crises (food, energy, financial, migratory, democratic etc) and the successive failure of the Conferences on Climate Change in Copenhagen in December 2009 and Cancun in 2010, are the expression of the increased commodification of both material and intellectual aspects of life (land, air/CO2, forests, minerals, genes, education, health, water...).

This ecological representation of water as a common good explains why the creation of the ‘water business’ and the commercial logic of ‘public-private partnerships’ is so unacceptable.

educated according to the management gospel of the water multinationals, according to which one is supposed to ‘make water pay for itself’. This implies that water is sold, commoditised, considered in the same way as oil.

"Despite the current slavish focus on quarterly earnings reports," the authors state, "A company's market capitalization still represents – in theory – the expected value, in today's money, of all of its future profits." It can be argued that the effect of a long-term horizon in corporate strategy would necessarily lead to implementation of the very measures called for by CSR advocates, that is, the integration of environmental, social, and corporate governance (ESG) considerations into such strategies.

It would seem, then, that what the authors describe as ill-advised CSR measures—they cite as one example that of a mining company building a school in the community in which it operates—might more properly be described as corporate philanthropy, while other CSR measures described in the paper—such as strategic community initiatives, employee satisfaction, and the willingness of executives to accept lower compensation in return for investments in developing economies—both contribute to social benefit and lead to greater profitability in the long term.

The EP Association aims to ensure that the EP framework continues to create a level playing field across the globe and remains the standard in the financial industry for assessing and managing environmental and social risk.

The EP is a risk framework for identifying, assessing, and managing environmental and social risks in Project Finance transactions. Since the launch of the EP framework in June 2003 and a subsequent revision in 2006, there has been significant growth in the number of EP adopters from the original 10 to 77 financial institutions from 32 countries across the globe. During this period there has been significant development in environmental and social risk management practices, partly as a result of the greater challenges impacting affected communities and the environment and partly due to the changing financial landscape, particularly the ongoing financial crisis and changing public perception of the role of financial institutions.

‘…it is therefore essential for companies to undertake their businesses in line with global best practices in terms of meeting their civic obligations, upholding high ethical standards and above all in a sustainable manner to deliver tangible social and development impact in their operating environment’.

The company, through Mr. Thabo Mabe, Managing Director, said the renovation of some schools in its area of operation, Oregun, Ikeja is one strategic step the company is taking to fulfill part of its intent to ensure school children have a conducive place to study.

Bamaca remembered how - before the company admitted to being a mining operation, when “people didn't know what contamination was” - the company would hold “parties and celebrations in the community, giving sweets to children and beer to adults, knowing this is the local community way. They came in smooth.”

After peace was restored, former elements of a powerful security apparatus geared to domestic repression through massacres, assassinations and rape continued to operate unofficially, becoming known as the ‘hidden powers’. Mayan Nobel Prize winner Rigoberta Menchu rues a missed opportunity for the country: “We should have taken extraordinary measures - as indicated by the peace accords - in the socio-economic sphere to benefit the population, showing that people would have a better life in peace than in war. The conflict had its causes in inequality, in dictatorship. These root causes were not attacked. The root causes are still valid.” 

On 5 February this year, two months after the Q'eqchi' exchange, the village of Conejo gathered to discuss their response to the oil company’s incursion into their territory. The meeting was held in their village community centre, into which entered Manuel Choco, a former activist in Belize's 'Maya Movement' and now permitting officer of the oil company. Two activists of the local indigenous organisation SATIIM (Sarstoon Temash Institute for Indigenous Management) turned on the voice recorders on their mobile phones.

But precisely what causes firms in some countries to have higher uncertainty about future economic policies than others? Does the underlying political structure matter? What elements of the political structure, if any, matter for the level of policy uncertainty as perceived by private agents?

The study finds an inverted U-shaped relationship between firms' perceptions of policy uncertainty and political regime type. Firms in hybrid regimes report higher levels of concern over policy uncertainty than those at either of the far ends of the curve (see figure below). The study also suggests that the explanation of this phenomenon lies with a combination of polarized political competition and limited access to credible information regarding possible policy changes.

well-financed public relations machines, while creating an asymmetry in capacity between corporations and NGOs, also have their flip side: predisposing corporations to complacency. And, as BP has proven of late, even seemingly invincible CEOs get clumsy, making one stupid mistake after another. Just when they think they have things covered, out pops a scandal that catches them off-guard. The thing about scandals is that when they break, the fight widens. It is no longer the small civic organisation making the lone big fight, but everybody that has had an issue or two with the corporation that climbs in on the attack. Even shareholders lose confidence and listed companies have to face their worse nightmare: drastic shedding of share value.

You should not be too sure until you are very sure.  That gap of asymmetry quickly closes in. When this happens, time seems to be short and not on the side of corporations. While the BP oil spill looms large in our minds, two recent cases of corporate malpractice challenged by a collaboration of local and international NGOs have gone relatively unnoticed. Yet, given their protection of the public’s interests, they are important to highlight.

Unlike BP’s oil spill that is publicly visible (nobody can ignore dead birds and fish), biopiracy happens secretly in remote labs far from the public eye. Its detection requires passionate commitment and investigative skills

the Today programme's John Humphrys to ask a silly question last week: "Isn't the reality that so long as the oil companies are as greedy for profits and nothing else as they are, this problem is not going to go away?" he said, with reference to the issue of replacing oil with renewable energy. It's silly because it only demonstrates Cynicism 1.0: he knows these corporations aren't as eco-committed as they claim because they can still make money out of oil. But he implies that a time might come when plcs aren't "greedy for profits and nothing else". Cynicism 2.0 is realising that it won't and that we can only properly harness the power and wealth of oil companies for developing sustainable energy sources by creating a business environment in which that activity is as profitable, or looks like it will become as profitable, as drilling for oil.

Young people cannot be characterized as a capitalist generation. They are half capitalist and half socialist. Since the socialist leaning keeps rising among the young, it suggests — depending on how you interpret 'socialism' — that we are moving toward an America that is either center-left or actually majoritarian socialist," Derber concluded in his commentary titled "Capitalism: Big Surprises in Recent Polls."

"On the rocky beaches of Alaska, scientists plunged shovels and picks into the ground and dug 6,775 holes, repeatedly striking oil, still pungent and dangerous a dozen years after the Exxon Valdez infamously spilled its cargo. More than an ocean away, on the Breton coast of France, scientists surveying the damage after another huge oil spill (from the Amoco Cadiz in March 1978) found that disturbances in the food chain persisted for more than a decade. And on the southern Gulf coast in Mexico, an American researcher peering into a mangrove swamp spotted lingering damage 30 years after that shore was struck by an enormous spill," Justin Gillis and Leslie Kaufman noted in a July 17 New York Times article.

nowhere is the danger of China's out-of-control coal addiction more evident than in the 62 raging underground coal fires that have burned in Inner Mongolia since the early 1960s. Covering an area more than 3,000 miles (4.800 km) long, China's northern coal fires are estimated to destroy as many as 20 million tons of coal per year, more than the entire annual production of Germany. According to some estimates, these fires could be the cause of up to 2 to 3 percent of the world's carbon emissions from burning fossil fuels," Keating explained.

You recently described Aid to Africa as being like “pouring water in a bucket full of holes”. Can you explain this statement?The statement referred to the resources that flow out of the continent mainly in an illicit manner and in our 2010 Development Support Monitor (DSM) we identified them as follows.a) Big foreign companies take money out of their countries through tax breaks or illegal tax evasion.b) Multinational companies are also not properly taxed due to the lack of capacity of African authorities to put in place tax systemsc) The failure by multinational companies to declare profits translates into capital flightd) Falsified invoicing, or the inflating or undervaluing of prices to increase costs and diminish tax liability.e) "Round-tripping" where companies operating in a country send their money offshore and bring it back as "foreign investment" to get preferential tax treatment.f) Transfer mispricing, a phenomenon in which companies sell to each other at inflated prices, inflating costs in intra-corporate financial transactionsThese are in addition to the continent primarily exporting value in terms of primary products.As such, while we praise efforts for increasing resource flows to the continent in the form of Official Development Assistance (ODA), we highlight the fact that until this hemorrhaging is stopped there will always be a net effect of zero or even negative.