A recent writeup in the New York Times discussing a Harvard Business Review article makes the case that it depends, but overall, there is not much of a link between corporate behavior and performance. What is intriguing is that the authors state that while there is a weak correlation between good behavior and positive returns, bad behavior produces a much more prominent and consistent correlation.

I have not had a chance to read the HBR article yet, but the data and conclusion are not terribly surprising. In a system where profit-maximization is an obligation and niceties such as social responsibility are considered a kind of goodwill cake-icing (by most), social responsibility, if focused on, tends to default to either a risk-management or pubic relations initiative. Not a great endorsement, it would seem…

That said, if social responsibility is in its infancy (which I believe is the case), the data is not so alarming. When sales are strong, money is flowing in, bonuses are fat, and times seem good, most companies tend to celebrate and ponder how to further push the envelope. But an interesting thing happens along the way… One short-cut tends to lead to another. One decision where profit is prioritized over principle tends to lead to another. A legal problem that isn’t noticed today can probably be put off another day, right? How about another week? Okay, maybe next quarter or fiscal year (Hey! Look at our roaring stock price!!). The house of cards invariably collapses and suddenly everyone starts crying foul.

It seems to me that maybe, just maybe, doing the right thing could be a better choice (you know, if your objective is long-term profit maximization and not short-term fat bonus maximization, or some other selfish shenanigan…).

It looks as though the authors have been posting for several months though I just learned of the blog through a recent press release. The content is excellent and should be a daily or weekly must-read for anyone interested in sustainability or CSR issues: The Triple Bottom Line Blog. From the release:

“TBL Blog will keep CSR managers and sustainability professionals up-to-date on current issues, provide analysis and advice, highlight practical resources, and encourage a dynamic conversation about the challenges and opportunities of sustainability.”

TAGS: TBL | triple bottom line | sustainability | social responsibility | CSR

We have added a new section containing resources and tools related to business ethics, corporate social responsibility, and socially responsible investing. In addition, current press releases posted on CSRwire.com are listed in the right column. New content will be added over time so be sure to check back regularly for any new additions.

If you have a resource that you think should be included, please contact us with the relevant information.

TAGS: CSR | business ethics | SRI | corporate social responsibility | resources | tools

While perusing our site stats I discovered a site with an excellent collection of links (Credo is listed under Corporate Responsibility). Pablo Halkyard (I assume, based on the title of the page that he is the site owner) has amassed links of blogs and sites covering, “international development, social enterprise, Africa, cause marketing, technology for development, microfinance, philanthropy, healthcare, the environment and corporate responsibility.” Be sure to check the list out when you have a moment.

CSRwire today has a release from SustainableBusiness.com that presents the first positive news I have read regarding the real estate industry in some months: Real Estate Industry Quietly Embracing Green Development, Progressive Investor Reports. Following are a few interesting snippets:

“In an analysis of the industry, Progressive Investor reports that 41% of the 300 U.S. real estate investment trusts (REITs) are actively pursuing energy efficiency and green building upgrades and another 27% plan to do so.”

Those figures are a bit too low to be firmly optimistic, but promising nonetheless. Several factors were cited for the increased interest in incorporating green design into real estate:

• Higher energy costs
• Lower cost of “building green” than in years prior
• Increasing client/tenant preference for green buildings
• Noted increase in high-profile clients establishing green corporate headquarters (Bank of America, Toyota, Goldman Sachs, and others mentioned)
• Increasing mandate for green building
• Preemptive attempt to flush non-green and/or older and more inefficient properties from portfolios by real estate firms

TAGS: CSR | green building | REIT | sustainability | sustainable design | green design

Happy Easter! Many blessings to you and your family on this wonderful day.

~ Peter

…Or lack thereof, I suppose.

I tend not to write about technology issues, and even less so about international technology issues, but a recent article on Ars Technica piqued my interest enough to mention it here. (As an aside, if you have not visited Ars Technica before, I’d recommend popping by every now and then, even if technology is low on your interest-radar.) The article, World Economic Forum releases annual IT rankings; US plummets from the top, touches on the decline of US-dominance in technology.

Why did it grab my attention? In short, I tend to look at broad metrics such as where a nation stands relative to its peers in technology investment, innovation, and leadership, as a barometer for other complimentary metrics. While this is a rough (perhaps very rough) exercise, it is conceivable to correlate US technology innovation with the country’s innovation in math or science education. Again, this is rough, but a decline in technology dominance can certainly stem from a decline in related education innovation, in the current educational environment, and perhaps more reasonably in periods prior.

Looking to similar measures as indicators for progress, or a decline in progress, for business innovation (as it pertains to CSR, ethics, governance, sustainability, etc.) is practical and effective. Obviously the closer the relevance of the metric is to such issues (e.g. international rankings on the development of alternative fuels points to sustainability issues), the greater the correlation and utility between the two will be.

If you have an interest in technology issues, here are a few passages from the article you might find particularly interesting:

“Denmark has been steadily climbing towards the number one spot in the GITR, and the report credits government policy there—and in other top-ranked countries—along with a good system of higher education that produces technology-savvy graduates.

“…Higher education is keeping the US in the game; public policy that hinders technological innovation and overbroad regulation are responsible for the drop in rankings. ‘Much of the slip can be attributed to a relatively complex political and regulatory business environment,’ according to Soumitra Dutta, Dean of External Relations at INSEAD and another report coeditor.”

TAGS: technology | US | innovation | complacency | leadership

Xcitec GmbH, a German software firm (the link points to the firm’s English-language site), today issued a press release touting the CSR features of their standard supplier-management software. Skeptical? Supplier software to enhance corporate social responsibility? Sounds a bit improbable to me. I found the release rather vague, and following a visit to the company’s website, failed to find more detail regarding the CSR features than was contained in the press release.

Even though I was unable to find greater detail, I like the intended purpose of the software:

“Xcitec standard software realizes Corporate Responsibility in all major supplier management steps – supplier qualification, supplier rating and supplier development. During supplier qualification, the supplier is extensively questioned regarding risk factors. CR aspects are integrated into the criteria catalog during supplier rating, and the supplier’s adherence to these is evaluated. Supplier development documents supplier optimization measures and monitors progress.”

I would be interested in seeing the software in action — how it works, whether the CSR features are bloat or if they actually help increase supplier accountability, etc. If you have experience with the software, please let me know.

TAGS: CSR | Xcitec | supply chain management | ethics

In short, the combination results in a “Whole Trade^TM Guarantee,” or a guarantee of high quality fair trade products (see a recent Whole Foods press release for more info). The guarantee seems like a bit of marketing hype, but should also help push fair trade issues to a broader market. In short, the guarantee should indicate that a product meets the following criteria:

• exceptional product quality,
• more money for producers,
• better wages and working conditions for workers,
• sound environmental production practices that promote biodiversity, and
• support of poverty eradication via donating one percent of product sales to the Whole Planet Foundation^TM.

TAGS: Fair Trade | Whole Trade | Whole Foods | Organic | Coffee | FTC

Continuing with the sustainability theme, here’s an interesting tidbit via ARS Technica about a Google embracing solar power: “It’s Easy Being Green: Google Goes Solar.” I particularly like the idea of using some of the panels as shades in the company’s parking lot. Here’s a clip from the post:

“9,212 Sharp photovoltaic modules now cover the rooftops of the Googleplex, each one capable of pumping out 208W of DC power in full sun. To gain even more solar surface area, Google installed solar panels as “shades” over several of its parking lots, keeping cars cool and generating power at the same time. The installation can generate 30 percent of Google’s peak demand power, or enough to light about 1,000 California homes.”

TAGS: Google | Solar | Sustainability | Sun | Alternative Power | Electricity | Energy | CSR