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Archive for the ‘CSR’ Category

GE: Good citizen, but where’s the payoff?

Thursday, July 29th, 2010

“Responsible business,” says Bob Corcoran, “is good business.”

And what’s responsible business? “Make money, make it ethically and make a difference.”

Bob Corcoran

Bob is vice president for corporate citizenship at GE, a 30-year company veteran, and a good guy. We met in 2o04 when we traveled together in Ghana while I was reporting a story on GE’s values for FORTUNE. (See Money and Morals at GE.)  Recently we spoke about GE’s 2009 citizenship report, and about what GE has learned in the past five years from its corporate citizenship efforts, including its high-profile campaign around Ecomagination, which focuses the company, and its marketing, on products and services that help solve the world’s big environment problems.

Inside GE, Ecomagination is deemed a success, so much so that it has spawned a sister initiative (if you can spawn a sister) called Healthymagination, focused on profitably creating better health for more people. GE says that it expects Ecomagination product revenues to grow at twice the rate of GE’s overall revenue between now and 2015.

The logic behind both initiatives is simple, Bob noted. Big global problems demand big solutions from big companies. GE prides itself on “tackling the world’s most complex and pressing problems,” as chief executive Jeff Immelt writes in the report.

The trouble is, the payoff for GE’s shareholders have been disappointing. I didn’t realize just how disappointing until I put together this chart comparing GE’s stock-price performance to the S&P500 and to a couple of its conglomerate competitors, Siemens and United Technologies. (more…)

The next debt crisis will be ecological

Thursday, May 27th, 2010

one_earthAnyone who paid attention learned a lot from the global financial crisis of 2008. Here are three lessons that were burned into my brain:

1. Live within your means. Debt creates risk. When homeowners, investors or banks take on lots  of debt, and something goes awry—and it will—they will pay, big time.

2. We’re interdependent. It’s not only those who take foolish risks who will pay; the rest of us will, too.  The global financial system, for better or worse, is so interconnected that failure in one sector can become contagious.

3. Accounting matters. People at the banks didn’t understand what they owned, what it was worth or the risks. They got the numbers wrong.

All of this comes to mind this week because I’m attending (and speaking at) the Amsterdam Global Conference on Sustainability and Transparency of the Global Reporting Initiative (GRI). That’s a lot of words to describe an event that is, at heart, about…living within our means, understanding that we are interdependent and getting the accounting right.

Only this time the piling up of debt, failure to see connections and shaky accounting isn’t just about money. It’s about the earth. We’re living way beyond our ecological means.

What’s more, if you thought the meltdown we just went through was bad, well, just wait for the next one. Who’s going to bail out the earth if it can no longer support us in the ways to which we have become accustomed? Mars? Venus? (more…)

Walmart: Still the green giant

Wednesday, May 19th, 2010

051026_MB_GreenWalmart_exWalmart and GE are the superpowers of corporate sustainability. They have enormous impact (WMT) and influence (GE). Recently, I hosted a dinner about sustainability for Motorola where an executive named Bill Olson described how the company developed its Eco-Moto W233 Renew carbon neutral, energy efficient, environmentally friendly phone. To do so, Motorola needed a company that would sell it recycled plastic for the phone. That was GE. It also needed a retailer to enthusiastically sell the phones. That was Walmart. In fact, as Bill recalled, WMT exec told him that giant retailer would before long be selling nothing but “green” phones.

The point is, WMT and GE are changing business, often in unseen ways. So it’s worth keeping up with their efforts to meet their own ambitious sustainability goals. Where are they succeeding? Where are they falling short? How strong is their commitment?

WMT’s 2010 Global Sustainability Report, which was released recently, provides a snapshot of the retailer’s work. The 47-page report (available here) is, if nothing else, a reminder of the scope  and depth of WMT’s efforts—the company is buying renewable power, reducing packaging, reducing waste, making its fleet more efficient, and selling more sustainable products, and not just here in the U.S.

Here are some highlights:

Bentonville Buddies: Mike Duke and Environmental Defense Fund's Fred Krupp

Bentonville Buddies: Mike Duke and Environmental Defense Fund's Fred Krupp

When CEO Mike Duke took over last year from Lee Scott, there were questions about his commitment to the sustainability efforts. He now appears to be a believer. In the introduction to the report, he writes that  WMT has been able to “broaden and accelerate” its commitment to sustainability even during the recession. And he says:

Sustainability continues to make Walmart a better company by reducing waste, lowering costs, driving innovation, increasing productivity and helping us fulfill our mission of saving people money so they can live better.

That’s about as good a summary of the business case for sustainability as you’ll find. (more…)

PNC Bank: Helping to destroy mountains

Tuesday, May 18th, 2010

2825430279_a3aa7cd059_oPNC, a big regional bank (annual revenues: $16 billion) based in Pittsburgh, has become the bank that environmental activists love to hate because of its support for mountaintop removal mining.

The bank was identified as the worst of the worst in Grading the Banks: A Mountaintop Removal Scorecard, a new ranking compiled by the Rainforest Action Network and the Sierra Club.

According to the report, the bank has made loans to six companies engaged in mountaintop removal mining: Massey Energy, Patriot Coal, Alpha Natural Resources, International Coal Group, Arch Coal and Consol Energy.

PNC, by the way, was a recipient of TARP funds (since paid back) so these loans were, at least in a small way, your tax dollars at work.

I emailed PNC to ask for their comment and got a prompt reply from Fred Solomon, vice president, corporate communications:

PNC’s practice is not to comment on analyst or other research reports, and in general, our credit policies are proprietary information.

Interesting. We’ll see how long that no-comment approach lasts, if any of the enviro groups decide to bring pressure directly on PNC, a major consumer bank in the mid-Atlantic region. Transparency, evidently, is not for now part of the PNC culture.

I’m returning to the topic of banks and coal after just a couple of weeks (See J.P. Morgan Chase’s Coal Problem) because of a couple of significant new developments. The first is the RAN/Sierra club report card–a tactic that, in the argot of the corporate campaigns, is known as “rank ‘em and spank ‘em”. The second is a new policy from by JP Morgan Chase, released just before the bank’s annual meeting, which was held today. (more…)

For business, is health the new “green”?

Sunday, May 2nd, 2010

A decade ago, few people would have thought that major banks, retailers or Internet companies would need environmental strategies. Yet today, they do–Bank of America has promised to invest $20 billion on sustainability initiatives over 10 years,  Wal-Mart’s aggressive environmental efforts are well known and eBay, while selling second-hand stuff, touts the idea of sustainable consumption.

This is largely because expectations of business are always rising. To pick another example: When I was a kid, we didn’t think about how or where or under what conditions our sneakers or T-shirts were made. Now brands that sell footwear or apparel maintain expensive and extensive efforts to monitor their supply chains, to avoid possible scandal around child labor or unsafe factories. Just as Nike or Gap.

So what’s the next big issue that companies need to worry about?

Edelman-Health-Barometer2The Edelman public relations firm says it’s health. Last month, after surveying 15,000 people in 11 countries, Edelman released what it calls its Health Engagement Barometer. The firm says health is emerging as a major corporate responsibility issue, not just for the obvious suspects–drug companies, insurance companies, the fast-food industry–but for companies of all kinds.

Of those surveyed, 69% said that

business should be as engaged in maintaining and improving personal and public health as it is in maintaining and improving the environment.

Respondents to the survey said they would be more willing to trust, do business with and even invest in companies that are engaged in health issues–by, for example, making available products that promote health, communicating the health risks of their products, helping their workers become healthier, helping address obesity or contributing to global health.

“Health is joining environment as a major sustainability issue and therefore a major issue for businesses that want to prosper in the future,” says Nancy Turett, global president for health at Edelman. (more…)

Revolution in the laundry room

Thursday, April 29th, 2010

I’ve joined the laundry-detergent revolution. Well, revolution may be stretching it  — but changes unfolding (sorry!) in laundry rooms across America show how innovation can move us closer to a sustainable economy.

The revolution metaphor is useful because it’s a reminder that real innovation is more likely to be driven by upstarts, insurgents and rebels–like Method, one of my favorite companies–than by powerful incumbents who want to preserve the status quo.

Take a look:

Over the last several years, big, wasteful jugs of  laundry detergent like this one from Procter & Gamble’s Tide  have all but disappeared from grocery store shelves. These jugs were good for marketing people who plastered messages on the package but they weren’t good for anyone else.Tide

Today, the new normal is concentrated 2x (meaning half the liquid in every load) detergents like Unilever’s Small and Mighty All, which use less packaging and water, saving money on shipping costs and waste. Tide sells lots of 2x as well.. The 2x packages are convenient, easy to store and pour. all+small+mighty

But the greenest, smartest and most innovative detergent is an 8x concentrate from Method, which uses less water in a smaller package and should save consumers money. This is good for everyone except news P&G or Unilever, which have profited from the  overdosing of laundry, as we’ll explain. new-method-laundry-detergent1-538x1024

Method is a privately-held company that was started in 2000 by Adam Lowry, a former climate scientist, and his friend Eric Ryan in their San Francisco bachelor pad. (more…)

Sanjeev Chadha: Why is PepsiCo building dams?

Saturday, April 24th, 2010

Sanjeev2Today’s guest post comes from Sanjeev  Chadha, the chairman and CEO of PepsiCo India. Sanjeev, who is 50, joined the company in 1989, as part of the team that brought Pepsi products to India and while the brands are doing well, they have been controversial because of their impact on water in a country where water shortages are an issue. Here he writes about how PepsiCo has responded to the expectations of Indian citizens–by both reducing its own water use and helping communities do a better job of gathering and storing water, to the point where PepsiCo now says it has a “positive water balance” in India, a global first for the company.

Images from space illustrate an Earth plentiful with vast blue oceans, seemingly providing our world with an endless supply of this necessary resource. What the pictures don’t show are the millions of people with no access to a clean water supply. Water shortage is a global crisis.

In my home country of India, a lack of fresh water supply has long been an issue among all classes of society. Our consumers range from urban businesspeople to farmers in the countryside. All Indians are acutely aware of the fallout of long-standing issues – from heavy farming and pesticide use to poor sewage treatment and industrial pollution – that impact the nation’s lack of fresh water. As a nation steeped in agriculture, water is of particular concern to farmers, who understand that we need to immediately find better ways to conserve water.

The company I work for, PepsiCo, takes these issues very seriously and is actively making a difference. Not so long ago, environmental activists in India targeted PepsiCo and other beverage companies operating in India  for consuming excessive groundwater in local communities. As you can imagine, our executives were surprised by these accusations, as we work to employ safe water and bottling practices in PepsiCo facilities around the world. In response, we continued to improve efforts to reduce water use in our plants and took additional action to provide local communities with the clean water they need.

In 2003, we took this a step further.  We launched a country-wide effort to achieve a Positive Water Balance in India by 2009. Essentially, this means that for all water used in our manufacturing process, we would give the same amount of water back to local communities, through in-plant processes to reduce our water use, as well as programs and interventions to create greater freshwater access in local areas. You can learn more about Positive Water Balance from the World Business Council for Sustainable Development.

Check Dam Sept 2009We also recognized the need for on-the-ground action in these communities. Replenishing water supplies only partially solves the problem; villagers also need tools to better manage these expanded water resources. It’s an important part of our role to invest in and aid our neighbors. And at PepsiCo’s facilities in India, we saw an opportunity to better manage water resources in these areas by working directly with community members.

After assessing several areas near our beverage manufacturing locations,  we determined that the creation of check-dams would be the best way to manage and rejuvenate the water supply. (more…)

DuPont: Beyond petroleum

Sunday, March 28th, 2010

Yes, I know, that’s BP’s slogan. But if you are looking for a company that is trying to replace oil with renewable products, consider DuPont.

Izod Yoga wear made with SoronaBrands like Izod (left), Timberland and Calvin Klein Gold all sell clothes made with DuPont’s Sorona, a renewable feedstock made from corn rather than petrochemicals. You’ll also find Sorona in some carpets sold by Mohawk Industries and in the interior fabrics of Toyota hybrids. DuPont’s  Hytrel, a thermoplastic elastomer (basically a rubbery plastic) made from plants, is used instead of oil-based materials in some Salomon ski boots and in automobile components. Zemea, a 100% renewably-sourced glycol from DuPont, which is made out of corn, shows up in skincare and cosmetics sold under the Philosophy brand and in Biotone spa products. Susterra, a bio-based propanediol made from corn sugar in Tennessee by a joint venture of DuPont and Tate & Lyle, finds its way into engine coolants and deicing materials.

DuPont’s efforts to get beyond petroleum are significant, and not just to people who don’t want to smear oil-based product on their face. Replacing petroleum-based products–from gasoline to plastic bags to lipstick–with renewably-sourced products makes consumption, and the economy more sustainable. That’s partly why DuPont is doing it, but the primary reason that the company is developing alternatives to oil is that it believes oil will become scarcer and prices will rise, opening the door for renewable alternatives.

In a fact sheet inelegantly headlined  Reducing Dependence on Fossil Fuels Megatrend, DuPont says:

Whether the focus is on energy security, climate change, population growth or the new reality of the global economy where demand for natural resources is increasing while availability is decreasing, the world needs to use energy smarter and generate it from more renewable sources.

As result, the company is developing a portfolio of biofuels including cellulosic ethanol; films, resins and substrates  for the solar photovoltaic industry;  new materials that insulate and encapsulate the components of wind turbines; membranes for fuel cells, and so on. Because DuPont is a business-to-business science company, its efforts are typically not seen by consumers. (The company’s best-known consumer brand is Corian, which is used in counter tops.) But as a Fortune 500 company with $27-billion in annual revenues, DuPont’s activities help shape countless other businesses and their products. (more…)

Ellen Weinreb: In search of the Chief Sustainability Officer

Saturday, March 27th, 2010

favfaceToday’s guest post comes from Ellen Weinreb, who is the  CEO of Sustainability Recruiting, a  search firm based in Berkeley (where else?) focusing on sustainability, corporate social responsibility (CSR) and corporate citizenship jobs. Ellen got interested in fair trade issues as an undergrad at Wellesley College (she sold African jewelry on campus), did a stint in Cameroon as  Peace Corps volunteer, got an MBA from Yale, and became a CSR consultant in the late 1990s. working  for such companies as Levi Strauss, HP and Nike. She’s now a full-time recruiter, and says that the market for CSR jobs, which took a steep downturn in 2009, seems to be recovering. “Climate change, Obama and clean tech are driving the increase in jobs for 2010,” she tells me. Ellen tweets about new CSR jobs @sustainablejobs and has an informative website at www.ellenweinreb.com.

As a corporate social responsibility (CSR) recruiter, I study CSR job postings and titles. For the past six years, I’ve been keeping a spreadsheet of CSR-related job postings. Last month I published my biennial CSR Jobs Report, which identifies hiring trends in the field.

One of  the most notable findings is the increase in senior-level corporate positions—those with VP and Director titles. Before 2006, none of the job postings had a title of VP or above. What’s changed? Companies are placing an increased value on CSR as a component of corporate strategy, which elevates the importance of positions overseeing CSR. Dave Stangis, Vice President of CSR and Sustainability at Campbell’s Soup, says: “The emergence of the VP of CSR and VP of Sustainability titles seems proof of the growing strategic business position of CSR.”

But, why stop at Vice President? How high can the title go? What about a Chief Sustainability Officer (CSO)? Can CSR find a place in the C-Suite? (more…)

100 Best Corporate Citizens? What a CROck!

Tuesday, March 23rd, 2010

google_logoGoogle challenges Internet censorship in China. It invests in solar power, electric cars, geothermal energy and the smart grid, and runs an array of programs to help its employees become more “green.” It’s consistently voted one of the best places to work. And it has an inspiring mission: to organize all of the world’s information.

Yet Google doesn’t even come close to making the 2010 list of 100 Best Corporate Citizens put together by CRO Magazine, now known as Corporate Responsibility Magazine.

Nor does Timberland, a pioneer in corporate responsibility, which monitors its global supply chain, provides employees with generous benefits including time off to volunteer and experiments with labels on its shoes and boots that disclose their social and environmental impact. General Electric, meanwhile, has won praise from environmental groups like the World Resources Council and Environmental Defense for its EcoMagination campaign, and it has led the battle for climate change legislation in Washington. But GE, too, didn’t make the cut.

Who did?

2597643759_083ac733b9Oil companies Hess Corp. (No. 10 on the list) , ExxonMobil (No. 51, which for years sought to delay action to deal with climate change, says Greenpeace), Occidental Petroleum (No. 26, accused of contaminating the Amazon) and Chevron (No. 56, targeted in a landmark class action suit for creating en environmental catastrophe in Ecuador).

The Southern Co. (No. 71), a coal-burning utility which led the fight against the administration’s climate change bill.

And the Newmont Mining Corp (No. 16)., whose gold mines in Nevada have been major sources of mercury pollution.

One last example. Whole Foods Market, which has done more to promote organic agriculture than any company in America, doesn’t make the list but Yum! Brands (No. 62) does. Yum!’s contributions to corporate responsibility include KFC, Pizza Hut and Taco Bell.

If nothing else, all this proves that it’s not easy to make a list of the 100 Best Corporate Citizens. In fact, it’s really hard. How do you compare HP (No. 1 on the list) with Kimberly-Clark (5), Wal-Mart (21), Nike (23), Green Mountain Coffee Roasters (39),  Duke Energy (43), Citigroup (57) and Ford (88). They’re in disparate businesses, with different issues.

Simply deciding whether a single company is “good” or “bad”or somewhere in the middle involves a slew of value judgments. If you think nuclear energy will help solve the climate crisis, you’ll applaud the Southern Co. which is pushing new plants; if not, you’ll feel differently. Coca Cola (No. 8) has a great track record on water and packaging issues but the company’s core product is a sugary soft drink. Newmont Mining has an ugly history, but it’s working hard to clean up its act–how far should we look back when ranking citizenship?  Merck (17) has evidently been forgiven for the Vioxx scandal, while Pfizer is in the penalty box after paying a record fine for illegal drug marketing last fall.

Still, while some debate is inevitable, this list strikes me as way off base. (more…)