Who’s responsible for factory conditions in poor countries? Has CSR gone too far?

garment-factoryJust who is responsible for the fire in a garment factory in Bangladesh that killed more than 100 workers in November?

The factory owner? The government of Bangladesh? US and European brands and retailers who bought the clothes made there? Shoppers who demand the latest styles at low prices?

And who deserves credit for the improvements in working conditions at Foxconn, China’s largest employer and Apple’s biggest supplier?

Apple? The Chinese labor market? Journalists at The New York Times?

Similar questions could be asked about paint factories that discharge pollution into rivers, toy factories that use dangerous chemicals or factories everywhere that run inefficient equipment or burn dirty fuels.

For nearly two decades, a core belief of the social-responsibility movement  has been that western brands and retailers must take responsibility for the social and environmental performance of the factories in their supply chain. This has created an immense infrastructure–an industry, really, of consultants who write codes of conduct for those factories, inspect the factories, report on them and deploy a combination of carrots and sticks that, at least in theory, bring about improved performance.

In essence, US and European brands have become quasi-governmental, undemocratic standards setters and enforcers of social and environmental norms.

So how’s it working? The year just past put a spotlight on a glaring failure of that system–the fire in Bangladesh, where factory conditions in the garment industry are widely deemed to remain unsafe–and on what has been cited as one of its successes–the new transparency of Apple’s supply chain, and the improved conditions at Foxconn, which supplies HP, Sony, Dell and other electronics companies, as well as Apple. [click to continue...]

Tim Mohin: Changing business from the inside out

When I went to college, people with a strong social conscience went into politics or government, joined the Peace Corps, taught school, or became public-interest lawyers or doctors– in other words, they did just about anything but go into the business world. That’s no longer true, thank goodness. Today’s students understand that business can be a force for good and my  friend Tim Mohin — we serve together on the board of Net Impact — has written a new book called Changing Business From the Inside Out: A Treehugger’s Guide to Working in Corporations that helps business people, as well as students, understand how they can have a positive impact inside corporate America. Tim, who is currently direct of corporate responsibility at chip-maker AMD, previously worked on social-responsibility issues at Apple and Intel. His book has been heralded as “essential reading for anyone who wants to build a meaningful career”  by Aron Cramer, the CEO of Business for Social Responsibility. Here is a guest post from Tim about that offers a sneak peek at the book.

Like jumbo shrimp or military intelligence, “corporate responsibility” is considered an oxymoron by  many. People are skeptical of corporations and with good reason. Massive corporate scandals ranging from the 2008 mortgage meltdown, to the BP oil spill, to the recent headlines about Wells Fargo and Barclay’s have left a trail of destruction. The cost to repair the damage has been borne by society in the form of taxpayer-funded bailouts and environmental cleanup. Growing distrust in corporations boiled over last fall, sending young people into the streets in the Occupy Wall Street movement. So, at a time when trust in corporations has reached an all-time low, why is interest in corporate responsibility at an all-time high?

Even before the Occupy protesters set up their camps, corporate behavior was under intense scrutiny.  Regulations like “Sarbanes Oxley” and “Dodd-Frank,” required greater levels of transparency, a trend that has been fueled by social media and the Internet.  For more than a decade, companies in all industries have voluntarily published corporate responsibility or sustainability reports. CorporateRegister.com allows you to search 41,238 corporate responsibility reports across 9,153 companies, a number that has been steadily increasing.

Maybe there is a cause and effect here. The corporate scandals of the past have shown by painful example, just how quickly a company’s reputation, and brand value, can be damaged. Company employees, customers and shareholders know more, and increasingly care more, about corporate behavior.   So in today’s world, smart business leaders know that investing in ethical behavior is money well spent.

More important, I believe, is the need of every company to attract and engage talent.  A new younger generation of leaders is rising in corporate America,  and many of them bring social and environmental values to the job and will only work for responsible companies.

My new book, Changing Business from the Inside Out, delivers practical advice to this new group of committed business people. They recognize the power of business to drive positive change in the world. Changing Business From the Inside Out is “field guide” of practical tips, hard-won wisdom and leading edge concepts for people interested in a career in corporate responsibility. Here are the top five tips from the book: [click to continue...]

Is investing in poor women good business?

A health educator at her work station in Bangladesh

One lesson of the Apple in China scandal is that factory monitoring is a necessary but insufficient way to improve the lives of workers in poor countries. Apple inspected its suppliers’ factories, but conditions remain harsh. While strengthening inspections and sanctions, smart brands and retailers are finding ways to help workers in their supply chains gain more control over their work and lives.

A program run by BSR (Business for Social Responsibility) called the HERproject, which gives women working in export factories access to health information, is an example of what could–and should–be done. Teaching young women about health, including reproductive health and family planning, is, by itself, a good thing. It also delivers a not-so-subtle message to factory owners that it might be good for their business to take better care of workers, instead of exploiting them until they are used up.

Many factory owners “see their workers as cogs in a machine” and act accordingly, says Racheal Yeager, who leads the HERproject for BSR. “That’s why there are high rates of turnover and high rates of absenteeism.”

“What we’re trying to do is change the mindset of the factory management,” she says. [click to continue...]

Apple’s China problem–and ours

More than a decade after the Nike scandals of the late 1990s exposed terrible working conditions in the Asian factories where most of our stuff is made, has anything changed? To be sure, in the years since, most US brands — not just footwear and apparel companies like Nike, Timberland and Gap, but corporate giants like GE and Walmart — have assumed responsibility for human rights and environmental problems throughout their supply chains. But are conditions any better for the workers?

Those questions are front-page news these days, literally, in The New York Times, which has published two long and extraordinary stories about Apple and its supply chain in China. [See How the US Lost Out on iPhone Work and especially In China, Human Costs are built into an IPad.] The Apple-in-China story is also brought to life by Mr. Daisey and the Apple Factory, a lively, provocative episode of public radio’s This American Life, in which an actor-turned-reporter  named Mike Daisey investigates conditions at a Foxconn factory in Shenzhen. Together this reporting paints a shameful picture of harsh and unsafe working conditions at Apple suppliers: sometimes deadly safety issues, chemicals that scar people’s hands, 60-hour weeks, long stretches of work with no breaks, a rash of worker suicides, etc. To get some perspective, I spoke with Dan Viederman, the executive director of Verite, a nonprofit that helps companies build more humane and sustainable supply chains, and I’ve been reading my friend Adam Lashinsky’s excellent new book, Inside Apple.

Foxconn offers medical care on its campuses

For starters, let’s be clear: This is not an Apple problem. The focus of both The Times’ reporting and Mike Daisey’s story is Foxconn, which is said to be China’s biggest private employer and may be the world’s largest manufacturing company. It employs 1.2 million people (!) and assembles an estimated 40 percent of the world’s consumer electronics, for customers including Amazon, Dell, Hewlett-Packard, Nintendo, Nokia and Samsung, according to The Times. Part of a company called Hon Hai that is headquartered in Taiwan, Foxconn operates not just in Asia, but in the Czech Republic, Mexico and Brazil. It publishes a corporate social responsibility report and has US-based employees in Houston and Austin, TX.  Most Americans, of course, have never heard of Foxconn although they probably own something that was made by the company. [click to continue...]

Why Google invests in clean energy

Last year, Google invested more than $915 million in clean energy projects–solar, wind and transmission.

That’s a lot of money, even for Google, which had $38 billion in revenues in 2011. The investments don’t appear to be core to the company’s mission of organizing information, and they have attracted criticism, as well as some careless reporting, implying that the Internet giant is exiting the alternative energy business.

Does Google have an energy policy? Does it need one?

To find out,  I recently went to see Rick Needham, Google’s director of green business operations, at the company’s fabled headquarters (well, fabled for a 13-year-old company, anyway) in Mountain View, CA.

I came away not merely persuaded that Google’s energy investments make sense, but thinking that other companies that consume lots of electricity and have a pile of cash on their balance sheets  — Apple, Microsoft and GE come to mind — should consider deploying some of their cash in the clean energy sector.

Clean-energy investing isn’t philanthropy for Google. It’s business. In fact, it’s a classic double-bottom line investment, one that is intended to deliver environmental as well as financial benefits.

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Big brands take climate action but…

Led by Unilever, Astra Zeneca and Nike, consumer brands are taking climate change more seriously than ever, says a new report from Climate Counts, a nonprofit that rates some of the world’s largest companies on their climate impact.

Big companies are reporting emissions, committing to targets and becoming more vocal in the policy arena, according to the report.

“There’s evidence to suggest we have reached a remarkable tipping point,” says Mike Bellamente, project director of Climate Counts. “Global corporations are increasingly acknowledging climate change as reality and are adopting measures to reduce their emissions and environmental impact.”

This is the fifth report from Climate Counts, which is the brainchild of Stonyfield Farms CE-Yo Gary Hirshberg. The ratings are intended to make consumers more aware of leaders and laggards on climate — the term of art for this is “rank ‘em and spank ‘em — as well as to spur companies to do better. or whatever reason, companies are improving: Bellamente told me over the phone the other day that the average score for the 136 companies rated this year is up by an impressive 54% from the initial set of ratings. [click to continue...]

Modern-day slavery: Here, there and everywhere

57470512SH007_migrantsModern-day slavery is not just about sex workers or poor people in faraway places.

Some farmworkers in the U.S., for all practical purposes, work as slaves.  Laborers  with few or no rights, working under inhumane conditions, typically far home, have produced such products as  blueberries, organic milk, personal computers or cell phones and garments imported from India, a new report says.

Consider:

An estimated 12 to 27 million people are victims of slavery, and other forms of forced labor around the world. In the United States alone, 10,000 or more people are being forced to work at any given time.

The report, called Help Wanted: Hiring, Human Trafficking and Modern-Day Slavery in the Global Economy (PDF for download, here),  was published by Verite, a non-profit based in Amherst, Mass., that monitors and reports on  labor rights abuses around the world. (It was funded by Humanity United, a nonprofit focused on peace and human rights started and chaired by Pam Omidyar.) Over the years, Verite has helped identify and clean up the supply chains of such global brands as Timberland, Gap, Levi Strauss, Apple, Disney and HP. I met with Verite’s executive director, Dan Viederman, last week in Washington to talk about the report, and what can be done to deal with slavery. [click to continue...]

Shop with your (gay-friendly) values

67838081_e8084e86acWith the (yuk) holiday shopping season upon us, this weekend seems like a good time to devote a series of blogposts to the idea of shopping with your values. But before I get to today’s topic–the Buying for Equality guide published by the Human Rights Campaign–let me first humbly suggest that one way to express your values this season, if you care about leaving a more sustainable planet to our children, is not to shop at all, or to shop less.

Over-consumption is a problem. If all of the 6.8 billion people on the planet lived like Americans we’d be in trouble. Today, Black Friday, the busiest day of the year is also known as Buy Nothing Day. This year the organizers are saying:

We want you to not only stop buying for 24 hours, but to shut off your lights, televisions and other nonessential appliances. We want you to park your car, turn off your phones and log off of your computer for the day.

This is a nonstarter for me. I’m not parking my car, turning off my phone or shutting down my laptop (obviously). No way, no how. Indeed, I worry that a call to action like that turns off more people than it inspires. I much prefer the holiday messaging from the Center for a New American Dream, which exhorts people to simplify the holidays, by planning a holiday with more fun and less stuff. But most of us still want at least some stuff. Today, and over the next couple of days, I’ll try to suggest some ways we can acquire stuff that aligns with our values. [click to continue...]

The U.S. Chamber’s climate blunders

So now America’s biggest business lobby and late-night comic David Letterman have something in common: They have really, really embarrassed themselves.

Of course, there are significant differences between Letterman’s womanizing and the U.S. Chamber of Commerce’s backward-looking opposition to climate-change legislation, which is causing the chamber to lose members, prestige and, worst of all, clout.

For one thing, the chamber’s blunder was entirely unnecessary.

For another, the chamber has yet to apologize.

CBS's Letterman

CBS's Letterman

But the bottom line is that the chamber is embarrassed, or should be. It has lost a number of high profile members – utility companies Exelon, PG&E and PNM Resources and, most recently, Apple, whose image as a forward-looking company left the chamber looking stuck in the past. (One clever headline put it, Apple, citing climate, tells U.S. Chamber iQuit) A Nike executive resigned from the chamber board. Today’s New York Times and Washington Post featured full-page ads from big companies and environmentalists calling upon the U.S. Senate to “pass clean energy legislation with a cap on greenhouse gas emissions this year.” The ads were signed by, among others, Dow, Exelon, United Technologies, Duke Energy, GE, Weyerhauser, Constellation Energy, Interface, PSEG, Deutsche Bank, Entergy, Johnson Controls and NRG. That was a direct slap at the chamber, too.

The Chamber's Donahue

The Chamber's Donahue

Chamber CEO Tom Donahue can’t say he wasn’t warned.

Consider the fact that more than two and half years ago–on January 22, 2007, to be precise—the CEOS of some of the chamber’s most important, high-profile members—GE’s Jeff Immelt, DuPont’s Chad Holliday, Duke Energy’s Jim Rogers, among them—stood besides some of America’s most important environmentalists, including Fred Krupp of the Environmental Defense Fund and Jonathan Lash of the World Resources Institute, to declare that anthropogenic global warming is a problem and

to call on the federal government to enact legislation requiring significant reductions of greenhouse gas emissions.

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