Via ARS Technica: Libel Case Over iPod Factory Labor Abuses Dropped

All is not well in Cupertino…

Those of you who know me well are aware of my affection for Apple Computer. I have been a long-time customer, supporter, and advocate.

In the past several years, however, I have become increasingly aware of much of Apple’s darker side. The company’s PR machine usually has a nice statement to smooth things out, which does little to make feel better, but still seems to have a certain amount of contempt for those seeking greater accountability.

Shareholder meetings are frequently accompanied by protests from environmental groups (as noted in the linked MacRumours article above), and there have been recent reports regarding the working conditions of an iPod OEM in China. I would very much like to see Apple take charge and lead tech companies in greater environmental awareness. Its computer recycling program is a great step forward, but still more could be done.

As an interesting aside, were I an Apple shareholder (I haven’t been for a few years—perhaps a bit shortsighted…) I would gladly forgo a certain amount of profit if it meant that the company would be a better steward of the environment and of human rights. That said, it is far easier to make such a claim than to strip all of the environmental and labor issues from such a large company, let alone one in such a highly competitive industry. If any company can make serious inroads, however, I’d put my money on Apple having the greatest potential. I hope that turns out to be the case.

[Update 8/29/06]: This is not related to the content above, but Google and Apple seem to be getting a bit more snuggly. I think the news is quite interesting in relation to the China-related issues both companies have been having the past year or so. The Microsoft connection obviously adds an interesting dimension, and this may reflect more poorly on Google (as the Techcruch post alludes to) than anticipated.

TAGS: Apple Computer | Mac | iPod | Macintosh | CSR | Corporate Governance

Coca-Cola Enterprises, Inc., the largest Coca-Cola bottler with operations in North America and western Europe, just released its 2005 Corporate Responsibility and Sustainability Review. The review is quite interesting (and very well designed) and covers all of the high-level information one might expect.

This review should be of interest to anyone familiar with the recent cola-company scandals in India mentioned earlier. The bottlers involved are different than Coca-Cola Enterprises, Inc., but it should be interesting to read the review in relation to the specific issues the India bottlers are grappling with. In particular, note the following items from the “Environmental Management System” section:

• Comply with applicable environmental laws and regulations everywhere that we operate
• Establish objectives and targets and conduct auditing to improve our performance on a consistent basis
• Incorporate environmental considerations in our business planning process, including design, production, packaging, transportation and ultimate disposal of materials related to our products
• Work with communities on environmental projects of local benefit

I have yet to do the research but am curious if the India Coca-Cola bottling company has the same level of stated commitment to environmental management and local cooperation.

As an aside, this serves as a good example of a company obviously going through the motions of at least attempting to show greater corporate social responsibility, yet perhaps having its efforts discounted due to the complications another Coca-Cola bottler (and perhaps other cola bottlers) is experiencing.

For the cynical observer, it becomes increasingly easy to pass off multinationals’ CSR efforts as empty PR attempts–a reality that is becoming more commonplace. I’m keeping my fingers crossed that the cynics will lose material to fling as the CSR movement matures.

TAGS: CSR | Coke | Coca-Cola | Corporate Responsibility | CSR Report

A good friend of mine from my MBA program just emailed me a link to a Goldman Sachs report that was quite compelling. The report covers the economic growth potential, over the next 50 years, of Brazil, Russia, India and China (the “BRICs economies”), and should be viewed by anyone interested in investing.

I personally found the report quite powerful for several reasons. First, I enjoy following markets and economic trends (not enough to be good at it), particularly ones that I am invested in. Second, the report paints a fairly good picture of what the world economic makeup will look like over the next 50 years, which could potentially impact (positively or negatively) the environment, business norms, consumption habits, and more.

For instance, as the BRICs economies continue to grow and consume sources of energy, prices will rise (great for investors but not so optimal for consumers) and resources will become more scarce. In such a scenario there is just as much opportunity to capitalize on the scarcity as there is to develop alternatives. It is the development of alternatives that I am most interested in watching over the next fifty years.

Here are a few additional observations I had while viewing the report:

• BRICs, if the report is correct, will define the future of business far more than they do now. Doesn’t mean US, Japan and current other economic powerhouses will fade away or dramatically lose influence, but that more players will be present at the table. This could be equally positive and negative.
• The car purchasing statistics were quite interesting in that they showed a massive percentage of ownership sitting in the BRICs economies. Since such high growth in ownership is expected, there is a huge opportunity to create a more sustainable and environmentally friendly auto footprint. At the same time, there is also the potential for the growth to go in the other direction, adding to the already large environmental and natural resource issues we are experiencing.
• The energy and oil demand does not seem that extreme but still raises many important questions about the future of our environment in direct correlation to increased growth.
• From an investing standpoint, pay particular attention to the information on energy and commodities, as well as the potential appreciation of the BRICs economies’ currencies.

TAGS: SRI | BRICs Economies | Brazil | Russia | India | China

Image source: Global System Change homepage

I caught an interesting press release on CSRwire this morning that prompted me to do a bit of extra digging. The release, Total Corporate Responsibility (TCR): New Sustainability Approach Addresses Critical System Change Issue, covers a recent article by Frank Dixon which, “claims that evolving economic and political systems into sustainable forms is the best way to ensure business prosperity and probably the only way to provide a sustainable world for our children.”

Sounds intriguing. Here’s another clip from the press release:

“Effectively addressing these extremely complex systemic issues requires collaboration and adoption of a systems perspective. A new approach to sustainability, called Total Corporate Responsibility (TCR), does just this. TCR is being implemented by Gazeley Ltd, a wholly owned but independently operated Wal-Mart subsidiary based in the UK. Gazeley is a global real estate developer of distribution warehouses. It provides Wal-Mart and many other clients with environmentally-superior facilities that lower energy use and carbon emissions by as much as seventy percent.”

Navigating to Dixon’s site and reading more about Total Corporate Responsibility and Global System Change (GSC), it is somewhat difficult to figure out what GSC or TCR are exactly. There is a considerable amount of information on the site, both in text and linked articles, yet none of it gives me a clear idea about the specific changes or improvements Dixon suggests when working with a client. That doesn’t mean that GSC and TCR are simply catchy acronyms meant to muster up some more sales, but without some concrete information about the specific changes Dixon recommends, it is quite difficult to perform a more substantial evaluation.

If you are interested in learning more about either concept, I have a few suggestions. As a starting point, I’d recommend visiting Dixon’s website. From there, you will find a number of articles he has authored including one titled, System Change. Beyond those resources, a deeper search may be necessary.

TAGS: GSC | TCR | CSR | Frank Dixon | Global System Change

Jeffrey Hollender blogs about his decision to not sell Seventh Generation products through Wal-Mart:

• Original post: The Jolly Green Giant
• Follow-up post: Further Thoughts About the Jolly Green Giant

First, I applaud Jeffrey for holding his ground and making a very tough choice. Second, this issue is huge and is fodder for a fantastic discussion on so many ethics and governance-related issues.

Seventh Generation is a private company that was once public. Accordingly, Jeffrey has far more latitude following his personal ethics when making business decisions than he did when the company was public. In fact, turning down Wal-Mart as a customer, as much as it pains me to say so, would have been very poor form for a public company, on a strict corporate governance basis. In order to do so ethically, and according to his fiduciary duty to the company and its shareholders, Hollender would have needed to vet the idea to shareholders, achieve majority buy-in, and financially justify the rejection. It may not have been so difficult, especially given that Seventh Generation shareholders are theoretically more likely to warm to such action than might shareholders of Altria (…for instance), and it is equally plausible to justify an increase in sales due to the controversy and positive PR that might be garnered from the rejection. Even so, it is very interesting to look at this issue in relation to Seventh Generation’s current governance situation vs. its former governance situation.

I encourage you to read both of Hollender’s posts and see how his mix of ethical principles jive with business motives. They sit fantastically well with me, but could just as easily seem inane to someone as equally passionate about CSR and business ethics.

TAGS: Seventh Generation | Wal-Mart | Jeffrey Hollender | CSR | Corporate Social Responsibility | Ethics

Anyone interested in shareholder activism or corporate governance should check out A Proxy Battle: Shareholders vs. CEOs. It’s a great read and covers recent shareholder activism efforts quite well.

If you have ever tried to put into words what makes a good leader and have struggled a bit, take a gander at The Magic of a Great Business Leader. Jeannine Bauer does a great job of introducing some of the qualities of a great leader and also touches on ethics:

“These leaders have one primary and broad-based goal — that is, to do the right thing for their organization. In general, this means to pursue the success of the organizations according to the goals set for it. But on a more subtle level, doing the right thing will also be reflected in how this leader treats customers, employees, and suppliers. This leader’s underlying sense will be that using a win-win approach with every level of stakeholders will always lead to greater net results for the organization. Thus, the daily life in such an organization, in both its internal and external interactions, will feel positive, ethical and satisfying to all involved.”

I think she is spot on in her overview of great leaders, but I would take the ethical angle a bit further even. In my idealistic world view, great leaders have to be the most ethical individuals you have ever met, whom are not willing to compromise on moral issues for the sake of making a few bucks. Further, they need to be consistent in their representation of their ethical framework and how it comes into play during the regular mix of daily business. Employees, peers, customers, and any other stakeholders, should all have a relatively strong certainty that the leader will or will not jive with a certain scenario based upon their ethical framework. Such consistency removes uncertainty and doubt, and also sets a good example for everyone.

As a practical example, imagine you are in the finance department of a company with a great leader, whose actions have established a clear precedent for what to do in questionable situations. You come across a journal entry that is an error but makes the company look more profitable. You realize that your boss is responsible for the error and know that correcting it, or pointing it out might negatively impact your career. However, you also know that the great leader whom has exemplified strong ethics (let’s assume he or she is the CEO or CFO in this situation) would unwaveringly expect you to correct the error and identify it to prevent future errors. Your ability as an employee to do the right thing is greatly increased by the ethical example set by the company’s great leader.

I would also argue that companies lead by great ethical leaders have a greater propensity for stronger overall business ethics and a desire to pursue corporate social responsibility initiatives than those lead by less ethical leaders.

TAGS: Leadership | Ethical | Business Ethics | Integrity | CSR

My posting will probably be a bit light for the next few days but I wanted to put up a few CSR-related links that I found interesting:

• Corporate Social Responsibility: An Implementation Guide for Canadian Businesses: I plan on reading this later today, but from my initial skimming of the introduction, it looks to be a very helpful resource. The link provides an html or PDF option for viewing the guide.
• Social Responsibility Is Not A Warm, Fuzzy Fad: This is a great article about CSR and Canadian corporations, however, the content is applicable to corporations from all countries. The article references the guide I linked to above.
• ISO 26000 Press Release: A press release on CSRwire about progress in establishing ISO 26000 guidelines. ISO 26000 is a set of management guidelines for companies implementing social responsibility initiatives.

TAGS: CSR | ISO 26000 | Corporate Social Responsibility

The Business Ethics Blog discusses Sergey Brin’s recent comments regarding Google’s decision to enable censorship in China: Google on Google in China. While his candor is admirable, I’d be curious to hear if anyone feels there are corporate governance issues that may stem from Sergey’s openness.

TAGS: Google | China | Censorship | Business Ethics | CSR | Sergey Brin