Chocolate, and the Congo

Joe Whinney, in the DRC

Joe Whinney, in the DRC

I met Joe Whinney, the chief executive and founder of Theo Chocolate, last month here in Washington, and liked him right away–he’s an unpretentious high school dropout, with a great deal of enthusiasm for his work. It’s important work: Theo Chocolate is helping to alleviate poverty in one of the world’s most godforsaken places, the Democratic Republic of the Congo.

I wrote about Joe and Theo today for Guardian Sustainable Business. Here’s how my story begins:

Buying a Theo chocolate bar will not put a stop to the long-running conflict in the Democratic Republic of the Congo. But it will help, at least a little.

Seattle-based Theo sources cacao beans from war-torn eastern Congo and pays premium prices for them. By doing so, the chocolate maker provides a livelihood to about 2,000 farmers and indirect benefits to perhaps another 20,000 people in the Congo.

As a small company, with revenues of about $12m last year, Theo can only do so much. But its work in the Congo demonstrates how companies, big or small, can find ways to attack some of the world’s most intractable problems, if they have the will to do so.

“We’re trying to build a business that can change the way an entire industry conducts itself,” says Joe Whinney, Theo’s founder and CEO. His hope is that other chocolate companies invest in the livelihood of cacao farmers, as Theo has.

I hope you read the rest of the story. This is the second time this week that I’ve written about the DRC, where more than 5 million people have died in the past two decades; my previous story looked at Intel’s progress in eliminating conflict minerals from the Congo from its supply chain.

While I’m by no means an expert on the DRC, both stories suggest to me that businesses can play an important role in resolving conflicts and promoting economic development in even the poorest places in the world. NGOs like the Enough Project, which is working closely with Intel, the Eastern Congo Initiative, a group supported by the actor and activist Ben Affleck that is allied with Theo, are doing good work in the DRC, but it will take enlightened businesses like Intel and Theo Chocolate to provide sustainable livelihoods for people living there.

Theo’s work is especially impressive because of the way the company goes well beyond Fair Trade to support cacao farmers. It will be interesting to see if the world’s biggest chocolate companies follow this pioneering small one into the DRC.

By the way, I’m delighted that Joe Whinney will be joining us in May for the FORTUNE Brainstorm Green conference, about business and the environment.

Theo Classic Bars

Intel: Taking a stand on “conflict minerals”

International-CES-Sets-Trends-for-Future-2Last week, I attended my first International Consumer Electronics Show in Las Vegas. It’s a big  deal: 1.8 million square feet of noisy exhibition space inside a gigantic convention center, 3,200 exhibitors, all of them clamoring for attention, and 152,000 attendees, which explains, among other things, why there were about 1,000 people, no exaggeration, on the line waiting for taxis at the airport. All against the backdrop of Vegas.

I was there to moderate a panel about conflict minerals for Intel, about which, more below, but I have to say that I was underwhelmed by the rest of the show. Most of the gadgetry on display at the show struck me as expensive or useless, or both. No, I don’t want or need an 85-inch bendable TV. No, I don’t want or need wearable computers. (Nor does my dog need an integrated health and wellness platform.) The BMW i3 is a very cool new electric car but I am perfectlyu capable of making my own restaurant reservations, thanks, and I have Pandora on my phone, so I don’t need it built into the vehicle.

In fact, I have just about everything electronic or digital that I need on my phone, my iPad and laptop. As an industry expert named Brian Lam told Nick Bilton of The Times in this excellent summary of CES:

“You only need a phone and a tablet and a laptop, and maybe you need a TV and some headphones, but that covers 90 percent of the needs for 90 percent of the population,” said Mr. Lam, the editor of The Wirecuttera gadget website. “But this industry that employs all of these engineers, and has all of these factories and sales people, needs you to throw out your old stuff and buy new stuff — even if that new stuff” is only slightly upgraded.

That said, I enjoyed learning about the issue of conflict minerals, and meeting Intel’s CEO, Brian Krzanich, who has led the company (and the electronics industry) effort to do something about the fact that the sales of tantulum, tungsten, tin and gold are helping to finance a two-decade old war in the Democratic Republic of the Congo.

I wrote about conflict minerals today for Guardian Sustainable Business. Here’s how my story begins:

This year’s Consumer Electronics Show in Las Vegas showcased 110-inch curved TV sets, watches that monitor your vital signs, self-driving cars … and the technology industry’s efforts to curb violence in the war-torn Democratic Republic of the Congo.

Those efforts are being led by Intel, the giant (annual revenues of $52bn) maker of microprocessors for computer, tablets and mobile phones, among other things, and its new CEO, Brian Krzanich.

Near the end of a high-profile keynote address in which he demonstrated “smart earbuds”, 3D printing, advances in video gaming and an embedded processor designed to enable “wearable computing“, Krzanich paused and said:

“Okay. I’m going to switch gears for a minute now. … This is not an issue we would normally talk about at CES, but it is an issue that is very important and personal to me. That issue is conflict minerals.”

After he showed a somber video about the devastation in the Congo, where more than 5 million people have died since 1994 – many killed by armed groups using profits from the mining of four minerals, tantulum, tungsten, tin and gold – Krzanich promised that every Intel microprocessor will henceforth be conflict-free. The world’s first conflict-free processors will be validated as not containing minerals sourced from mines that finance fighting in the Congo, he said.

The story goes on to say that not all companies are on board with the effort to curb conflict minerals. In fact, the US Chamber of Commerce, the Business Roundtable and the National Association of Manufacturers have filed a lawsuit challenging a provision of the Dodd-Frank financial reform law that requires companies to report on their use of conflict minerals.

So this unorthodox, corporate-backed antiwar effort has sparked its own backlash–from business groups. It’s remarkable how the chamber winds up on the wrong side of so many issues.

You can read the rest of my story here. If you are really interested in the topic, here’s the video of my panel with Krzanich, Sasha Lehznev of the Enough Project and the actor and activist Robin Wright, who, I was pleased to read, won a Golden Globe last night for her performance on House of Cards.

[Disclosure: Intel paid me to moderate the panel at CES.]

Investing in Bangladesh factories–for a profit

bangladesh-garment-workersOliver Niedermaier is selling a “capitalist solution to one of capitalism’s worst problems” — the unsafe, exploitative, polluting factories in the global south. That’s the topic of my latest story for Guardian Sustainable Business.

Here’s how it begins:

After more than a decade of corporate investment in social responsibility programs, codes of conduct, teams of inspectors and public reporting – all of it intended to improve the working conditions of factories in poor countries – anyone paying attention knows the system isn’t working very well. The Tazreen factory fire and Rana Plaza building collapse in Bangladesh were poignant symbols of its failure.

Maybe it has failed because Western clothing brands and retailers – Nike, Gap, Walmart and the rest – have been behaving like regulators by writing rules and meting out punishment. At least, so argues Oliver Niedermaier, the founder and CEO of Tau Invesment Management. He advocates that businesses should instead try acting like capitalists, using markets and the potential of investment gains to reform their global supply chains.

Tau plans to raise $1bn to turn around factories in poor countries, beginning with the garment industry. Tau promises to deliver “improved transparency, greater dignity for workers, cleaner environments for communities, and enhanced performance and value for stakeholders”.

As the story goes on to say, this is an intriguing–but very much untested–idea. Can Tau raise the money? Will brands partner with the company, a newcomer to supply-chain issues? Most important, can factories in places like Bangladesh that adhere to the highest standards compete effective with those who do not?

I don’t have answers. But I do know that a new approach to the problem is desperately needed.

The NFL and brain injury: That’s entertainment?

Are you ready for some brain injuries?

Are you ready for some brain damage?

Fifteen years ago, with my friend and co-author Bill Carter, I wrote a book about the TV show Monday Night Football, which helped build the phenomenal popularity of the NFL. I was a big football fan then. So much so that I didn’t notice until last week that the opening sequence of Monday Night Football — ARE YOU READY FOR SOME FOOTBALL!!! — featured the helmets of the opposing teams crashing together.

A prescription, in other words, for brain injury.

The image flashed by briefly in the gripping and occasionally horrifying PBS Frontline documentary League of Denial, based on the book of the same name by investigative reporters Mark Fainaru-Ward and Steve Fainaru. Watch the program if it comes around again, or watch it on the web.

As regular readers of this blog know, I gave up watching the NFL about a year ago. But I decided to revisit the topic in my latest story for Guardian Sustainable Business.

Here’s how it begins:

Garment workers in Bangladesh and coal miners in India risk injury or death on the job. Their plight evokes outrage from advocacy groups and corporate-responsibility gurus.

Players in the National Football League are at risk, too – at risk of losing their mind, quite literally. Yet professional football remains America’s favorite sport, generating close to $10bn a year, with not much more than an occasional murmur of concern.

Strange.

Of course, any football fan knows that the game is violent and dangerous, especially at the pro level. Powerful men collide at high speed, and a bone-jarring tackle can break a leg or, occasionally, a neck.

But football is dangerous in another, more insidious way, as we were reminded last week by the publication of League of Denial: The NFL, Concussions and the Battle for Truth, an examination of football’s concussion crisis by investigative reporters Mark Fainaru-Ward and Steve Fainaru. As the book and an accompanying PBS Frontline documentary vividly demonstrate, football also is inherently dangerous to the brain – an inconvenient truth that the NFL went to extraordinary lengths to hide, deny and muddle.

Of course, as I note in the story, NFL players are paid a lot better than garment workers or coal miners. And today’s players surely are aware of the risks they face.  But the price they pay – brain damage that robs them of their very sense of self – is terribly steep. And to what end? To make our Sunday afternoons and Monday nights a little more fun? So corporate sponsors can sell beer and cars?

Frontline is produced by a PBS station in Boston, which sent a reporter out to get reaction from Bill Belichick, the coach of the New England Patriots, and star quarterback Tom Brady.

Belichick said:

First of all, I’m not really familiar with whatever it is you’re referring to, whatever this thing is. But it doesn’t make any difference whether there is or isn’t one going on. We have our protocol with all medical situations, including that one and that’s followed by our medical department, which I’m not a doctor and I don’t think we want me treating patients.

What we do in the medical department, that’s medical procedures that honestly I don’t know enough to talk about. But I can say this, there’s nothing more important to a coach than the health of his team. Without a healthy team, you don’t have a team. We try to do everything we can to have our players healthy, to prepare them, to prevent injuries and then to treat injuries and to have them play as close to 100 percent as we can because without them, you have no team.

Hmm. The Pats do “everything we can to have our players healthy…because without them, you have no team.” And if they lose their minds after they retire, well, you win some and you lose some.This guy has a heart of gold.

In fairness, the NFL is doing a better job these days of treating and preventing concussions. There have been rules changes, medical personnel on the sidelines, better understanding among all of the real risks of contact. Finally. But, remember, football is played in college and high schools, too, where kids model themselves on the hard-hitting pros. Frontline put a spotlight on a college and a high school player who, shockingly, suffered from brain injuries that appeared to be–no, we can’t be sure–related to football.

Do they understand the risks they are taking? Who’s looking out for them? Clearly not the NFL.

Winter Olympic sponsors, feeling the heat

coca_cola_olympics_2010_01

My latest story for Guardian Sustainable Business looks at the pressures from LGBT (lesbian, gay, bisexual, transgender) activists being brought to bear on big American companies that are sponsoring the Winter Olympics in Sochi, Russia, in February.

Interestingly, some of the companies–my story cites Coca-Cola as an example–are otherwise known as being gay-friendly. But although they support equality for their own workers, they are being asked to speak out more widely and publicly against the discrimination that LGBT people face in Russia and elsewhere.

Here’s how the story begins:

On the issue of gay rights, The Coca-Cola Co has a sparkling record. The company has recorded a perfect score on the Human Rights Campaign’s Corporate Equality Index since the index launched in 2006. Coca-Cola was one of the first US companies to support the proposed Employment Non-Discrimination Act , which would protect employees from discrimination due to sexual orientation, and its HR department has funded a lesbian, gay, bisexual and transgender (LGBT) employees association since 2000.

Despite all that, protesters gathered earlier this month beneath a Coke billboard in New York’s Times Square, pouring cans of Coke into a sewer and carrying banners reading: “Coke: Don’t Sponsor Hate.”

The problem, of course, is that Coca-Cola is a sponsor of the 2014 Winter Olympics in Sochi, Russia, which has been a target for gay activists since the Russian government enacted a draconian anti-gay law in July. Other Olympic sponsors, including McDonald’sGeneral Electric,Procter & GambleVisaSamsung and Dow, also are feeling pressure.

The controversy is the latest evidence that even companies that have done their level best to meet society’s expectations – around sexual orientation, or factory conditions in poor countries, or climate change, or any other headline-generating issue – can be caught unaware as expectations ratchet up. And expectations always seem to be ratcheting up.

You can read the rest here. My own view is that if the corporate sponsors are going to benefit from their association with the Olympics, and they are, they ought to at the very minimum publicly push the International Olympic Committee and the Russian hosts to be very clear that LGBT athletes, spectators and sponsors will not face any discrimination. That’s the least they can do. Whether they should also be expected to support LGBT activist groups in Russia and elsewhere in the world–that’s one of the requests from the Human Rights Campaign, America’s biggest gay-rights group–is a trickier question. But if you see gay rights as a civil rights issue, as I do, then it’s reasonable to ask that influential companies to be public about where they stand.

How to read a sustainability report

voices_gunther2It’s no exaggeration to say that a new corporate sustainability report is published nearly every day of the year. After all, most of the Fortune 500 now generate reports, many of which read like paeans to exemplary business behavior. If companies behaved as well as they are portrayed in these reports, the world would be a much, much better place.

Still, CSR or sustainability reports can be a useful starting point for looking at a company and its impact. In my latest story for the environmental website Ensia, I offer a guide to reading these reports. Here’s how it begins:

Corporate sustainability reports have been around since … well, it’s hard to say.  The first report may have been published by “companies in the chemical industry with serious image problems” in the 1980s, or by Ben & Jerry’s in 1989 or Shell in 1997. No matter — since then, more than 10,000 companies have published more than 50,000 reports, according to CorporateRegister.com, which maintains a searchable database of reports.

But who really reads them? As a reporter who covers business and sustainability, I do. Maybe you do, too — as an employee, investor, researcher or activist.

Here, then, are five tips to help you make sense of the next report that lands on your desk or arrives via email.

You’ll have to read the Ensia story to learn more but the key word to remember is context. The best corporate reports put their data in context, by comparing it with prior years or previous goals or industry peers or even the needs of the earth. Few reports meet this standard, alas.

Thanks to Steve Lydenberg and Bill Baue for their help with this story.

Illustration courtesy of Ensia

Are your investments tied to genocide?

SP1119147That’s a refugee camp in Sudan. If you are an investor in mutual funds, it’s possible–perhaps even likely–that you own a small share of one of a number of foreign oil companies that are doing business with the government of Sudan, and thereby helping to finance a genocidal, outlaw government that is directly and indirectly responsible for the deaths of millions of people, and the displacement of many more.

I’m returning to the subject of “genocide-free” investing with a column this week at Guardian Sustainable Business, about the puzzling and troubling refusal of a mutual fund managed by ING US to even consider divesting in holdings in foreign oil companies that do business in Sudan. US oil companies are prohibited by law from operating there, but US-based mutual funds are free to invest in Chinese, Indian and Malaysian oil companies that help finance the Sudanese authorities.

Despite the best efforts of an advocacy group called Investors Against Genocide, big US mutual fund companies including Fidelity, Vanguard, JP Morgan Chase and Franklin Templeton continue to invest those foreign oil companies. It’s not because they are unaware of the issue. I’ve covered the topic of “genocide-free” investing since 2007, beginning with a story for Fortune.com headlined Fidelity’s Sudan Problem, and followed a few months later by another called Warren Buffett and Darfur. By then, Harvard, Yale and Stanford had divested their holdings in PetroChina and Sinopec, demonstrating that divestment is both possible and practical. In 2009, as an investor in mutual funds managed by Fidelity and Vanguard, I voted for divestment (and blogged about it here).

A few mutual fund companies–notably T. Rowe Price and TIAA-CREF–have agreed to purge their holdings of the Asian oil companies, but most have resisted. Among the most egregious is ING US, whose own shareholders voted for divestment. If nothing else, this is a reminder that we’re a long way from achieving “shareholder democracy” in corporate America.

Here’s how my story for Guardian Sustainable Business begins:

Call me old school but, in my view, companies should be accountable to their owners.

They should also try to stay away from repressive governments like the one in Sudan, where millions of people have been killed in a long-running genocide.

So when, as part of a campaign to stop the flow of money to Sudan, investors voted to ask a mutual fund managed by ING US to sell its holdings in companies that “contribute to genocide or crimes against humanity,” you’d think that ING US would comply.

It has not.

You can read the rest here.

To put this in perspective: It has been more than 15 years since the U.S. imposed sanctions on Sudan, and nine years since the killings in Darfur were declared to be a genocide by the U.S. Congress. Yet financial institutions are still investing in the worst companies funding the genocide.

It’s another reason, not that we need one, why so much of Wall Street is rightly held in such low esteem by so many Americans.

My beef with B Corps

logoThere’s lot to like about the fast-growing B Corps movement, and one thing to dislike, as I explain in my latest column for Guardian Sustainable Business US.

If you’re reading this blog, you are probably aware of B Corps. The idea takes a bit of explaining. B Corps are businesses that are certified by a nonprofit organization called B Lab to meet what its backers call “rigorous standards of social and environmental performance, accountability, and transparency.” These businesses win certification much in the way that buildings are certified to have meet LEED environmental standards by the nonprofit U.S. Green Building Council; they have to complete an assessment of their performance, provide documentation and be open a review from B Lab, as the group explains here.

But the term B Corps is also used to describe “benefit corporations,” a corporate legal structure that has been set up by legislation that has now been passed by 20 states, including, most recently, Delaware. Benefit corporations need not be certified by B Lab, although many are.

It’s unavoidably confusing, but my beef with B Corps is simple.

The voluntary certification system makes sense to me, for reasons that I explain in the story–it’s a way to signal employees, customers and investors that a B Corps aims to do better than conventional companies. Most B Corps are small and privately held. Among the best known are Patagonia and Ben & Jerry’s, which is a unit of a conventional C Corps, Unilever.

The legal “benefit corporation” purportedly gives companies more freedom to serve society as a whole than conventional corporations have. I’m skeptical about this claim, to say the least, and I worry that it could be counterproductive–because it implies that conventional companies, which make up the bulk of the global economy, need to pursue profits, at the expense of broader social and environmental goals. This seems wrong on the face of it. After all, if Ben & Jerry’s can be certified as a “good” B Corps, doesn’t that mean that its parent company, Unilever, can be “good” too?

My worry is that the implicit argument — that most of the world’s companies don’t have the freedom to do the right thing for society — undermines faith in capitalism (which is fragile, at best, for good reason) and that it discourage reformers inside and outside of big companies who are pushing corporate America to do business better. It’s a bit smug to suggest that traditional companies can’t do as much good for the world as B Corps can.

Here’s how my story begins:

To the supporters of B Corps – benefit corporations that say they aim to serve workers, communities and the environment, as well as their owners – 1 August 2013 was an historic day. In what B Corps described as “a seismic shift in corporate law,” the state of Delaware, where one million businesses are legally registered, enacted legislation that will “redefine success in business” by giving the owners and managers of legally recognised B Corps protection as they pursue “a higher purpose than profit.”

The B Corps movement has much to be proud of: it has built a brand that stands for good business, attracted hundreds of committed followers and sparked debate about the role of business in society. But claims – sometimes made explicitly, sometimes implicitly – that B Corps have more freedom to take an expansive view of their social and environmental responsibilities is not only mistaken, but potentially damaging to the cause of sustainable business.

After all, if conventional companies have no choice but to focus narrowly on maximising short-term profits, at the expense of workers, communities and the planet, then we’re in a heap of trouble and unlikely to get out, because 99% of US businesses today are conventional C Corps, and most are likely to remain so.

You can read the rest here.

Garment industry deaths in Bangladesh: The end of the beginning?

SAMSUNG DIGITAL CAMERAGarment workers in Bangladesh have  labored in unsafe conditions for years. They will likely suffer for years to come.

But in the aftermath of the Tazreen factory fire last November, which killed at least 117 people, and the Rana Plaza building collapse in April, which killed more than 1,100, European and US retailers–operating on separate but parallel paths–have come together to act. Actually, to be more specific, they have come together to promise to act.

There’s lot of controversy about the US effort, called the Alliance for Bangladesh Worker Safety, because it does not include the meaningful participation of organized labor, at least not yet. But, as I write today in Guardian Sustainable Business, it’s a step forward.

Here’s how my story begins:

At long last, US apparel retailers have joined together to improve safety for garment workers in Bangladesh – most of them poor women, toiling in hazardous workplaces at the bottom of the bottom of the global supply chain.

Gap, Walmart, Target, Macy’s, VF Corporation and a dozen other companies that formed the Alliance for Bangladesh Worker Safety say they will set common safety standards, inspect all their factories in Bangladesh, make the results public, provide loans for repairs and give workers more power to protect themselves.

Is that sufficient? Labour rights groups say no. As the US companies unveiled their alliance in Washington, student protesters gathered outside, chanting “Shame on Walmart” and decrying the plan as a “fake safety scheme.”

It’s not. It’s a serious plan, with some money behind it, that includes a commitment to transparency, and mechanisms to enable workers to speak out about unsafe conditions. It’s not perfect – the alliance’s glaring flaw is a lack of participation from unions – but the US companies hope to bring in Bangladeshi and international labour groups.

The story goes on to describe the key role played by Gap and its executives in bringing the US retailers together. Gap has been deeply engaged in Bangladesh since December 2010–before Tazreen and Rana Plaza–when a fire at one of its suppliers’ factories killed 29 workers. [click to continue…]

Gestation crates: Not exactly hog heaven

pig_gestation_crates1Lately, I’ve been thinking about animal welfare. That’s partly that’s because I met Josh Balk of the Humane Society of the United States at the Fortune Brainstorm Green conference in May. Josh’s title is Director of Corporate Policy, Farm Animal Protection, at HSUS; his job is to work with big companies to get them to treat animals better.

Among other things, they are trying to get the pork industry to end the practice of confining m0ther pigs in gestation crates for most or all of their lives. These crates are designed so that the pig cannot turn around; their use has been compared to asking one of us to spend our lives in an airline seat.

Their battle with pig farmers is the topic of my story this week in Guardian Sustainable Business, headlined Why the US pork industry wants to shut down the debate over pig crates. Here’s how it begins:

Don’t try to convince the American pork industry that the customer is always right. Thousands of hog farmers and one of the industry’s big producers, Tyson Foods, want retailers, brands and supermarket shoppers to mind their own business and stop telling farmers how to raise pigs.

The issue? Gestation crates that confine mother pigs into metal enclosures so tightly that they cannot even turn around. The pork industry raises most sows in gestation crates, and says they do no harm.

But in the last year or so, about 40 companies – including fast-food chains McDonald’s, Subway, Burger King and Wendy’s, supermarkets Costco, Target and Albertson’s, food-service firms Compass Group, Sodexo and Aramark, and brands including Hillshire, which makes Jimmy Dean sausages and Ball Park Franks, and Kraft, which makes Oscar Mayer – have said that they will require their suppliers to eliminate the use of gestation crates by a certain date.

The industry is resisting, saying there’s no scientific basis to get rid of the crates. Dave Warner of the National Pork Producers Council told me that activist groups like HSUS have wrongly put pressure on the retailers and brands. [click to continue…]