A film about urban sprawl and peak oil might seem a bit off topic for a business ethics and corporate social responsibility blog, but if you see the connection and/or have an interest in either subject, I highly recommend you check out a fantastic documentary, The End of Suburbia.

If you need some help finding the bridge between this blog and the focus of the film, look no further than the endless forced expansion of the consumer’s appetite for more consumption (homes, cars, clothes, decorations, kitchen gadgets, high-tech gadgets, and so much more) by companies in the pursuit of increasing shareholder return. What’s a homebuilder to do when money is pouring in and competitors are continuing to put up ostentatious and resource-binging skyscraper homes (a.k.a. “McMansions”) at a frantic rate 100 miles out from city centers and lining up 0% down ARMs for the self-delusional nouveau-rich (a.k.a. the negative net-worth and heavily debt-laden soon-to-be or currently former middle class), even if they know deep inside that their business plan is not sustainable long-term (say, when the right crop of inflation and credit turmoil pops up…)? Build more houses of course!

Why not? they ask. Their competitor over at ABC CrazyBig Homes is churning them out like cans of tasty and completely nutritious meat on an assembly line earning a fat bonus each period, and watching their company’s stock price skyrocket. Who cares if the system comes crumbling down later as long as I get mine, they rationalize.

In the off chance that you are not paying attention to what is happening in the US right now, and increasingly around the world, the party is over folks. For those of you who have little adjustment to make when living standards and life styles see a reversion to the mean similar to what is likely to happen in the US housing market, I commend you. For those of you who face a much larger delta, I’d get started on making some adjustments right now.

Even if you are not slightly interested, I say bite the bullet and watch it anyway. Here’s an overview of the film to whet your appetite:

“Since World War II North Americans have invested much of their newfound wealth in suburbia. It has promised a sense of space, affordability, family life and upward mobility. As the population of suburban sprawl has exploded in the past 50 years, so too has the suburban way of life become embedded in the American consciousness.

“Suburbia, and all it promises, has become the American Dream.

“But as we enter the 21st century, serious questions are beginning to emerge about the sustainability of this way of life. With brutal honesty and a touch of irony, The End of Suburbia explores the American Way of Life and its prospects as the planet approaches a critical era, as global demand for fossil fuels begins to outstrip supply. World Oil Peak and the inevitable decline of fossil fuels are upon us now, some scientists and policy makers argue in this documentary.

“The consequences of inaction in the face of this global crisis are enormous. What does Oil Peak mean for North America? As energy prices skyrocket in the coming years, how will the populations of suburbia react to the collapse of their dream? Are today’s suburbs destined to become the slums of tomorrow? And what can be done NOW, individually and collectively, to avoid The End of Suburbia?“

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

As consumers, how we exercise our choice through spending money has a significant impact on the future decisions made by the companies we support. If we choose to give money to Company A for Product X, we are essentially communicating that Product X and Company A are filling a need for us, and in a manner that we find acceptable given the cost of Product X. In other words, you are not just buying that T-shirt for $15, you are casting a vote, supporting a company, and supporting an industry. This, of course, should not be news to anyone, nor is it a complex or unique perspective.

I tend to forget the above, and I imagine most other consumers do as well, any time I am just a bit too caught up in the weekly hem and haw of life. Sometimes, after a long day, I forget to scrutinize the label of a food package — I really just want to fork over some money, get home, and take my shoes off for a minute. So if it is quite easy for me as a consumer to slip every once in a while – was that coffee organic and Fair Trade, or just organic? – I imagine the rest of the consuming public is just as susceptible to wavering in their product scrutiny, if they are even inclined to dig deeper in the first place.

…On to some good news…

I found an interesting release via CSRWire this morning, which gave me a little bit of comfort that I might not have to be so fastidious when I shop someday. Wouldn’t it be nice if the majority of products (or all, if we can really dream) were produced in the most ethical, humane, and responsible manner and the only thought you have to give one product vs. another is whether you like its color?

The release, from REI – a company I wish I had more opportunity to support (…just how much camping and recreational gear can I reasonably fit in our house?) – notes that the company will be using a new label to identify products it sells that are “eco-sensitive.” What exactly does the label signify? Here’s a clip from REI’s site:

“As a company, industry and society, we are recognizing the need to tackle the challenges of ’sustainable’ products. From materials to production processes to transportation, there is a lot to do, but we believe that through innovation and creativity it is possible to design affordable outdoor gear and apparel that delivers quality, functionality, great style and better environmental performance.

“REI’s eco-sensitive program is a first step. By identifying better materials and offering a description of the benefits (and drawbacks) of these fabrics we hope to help consumers make informed choices and become more educated on the issues of ‘green’ products. We have started with an emphasis on fabrics with a high percentage of renewable, recycled and/or organic fibers.”

“Neat, but why is that a big deal,” you might think. I think it is important because it is a step in the right direction. I am just as big of a proponent of education initiatives, as I am of companies offering greater socially responsible options to its customers. It appears that REI will manage to provide its consumers with both. Rather than just stashing some brochures on the wall, or including a few green products in their mix, they are making a push to notify and educate their patrons and also provide them with more socially responsible consumption choices.

While I think it is great when a retailer offers something like Fair Trade coffee along side regular coffee, I rarely see the retailer take the next step and educate the people that scamper by the product. (I see this at Costco quite a bit — there are a number of Fair Trade and organic products available, priced quite well, but little to no information provided as to what those designations mean. To the consumer, if they are unaware and do not take the time to read the package, the products are simply another choice, and often just a few cents more expensive.)

I’ll try to visit a few REI locations over the next few months to see what I think in person, but from a concept standpoint, I think the idea is quite positive.

TAGS: REI | green | sustainability | CSR | social responsibility | eco-sensitive

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

I was in Washington D.C. for a few days with my wife and son and saw a bit of CSR in action. No, it didn’t crop up during on of the mid-June sunny jaunts with my son to the Mall or one of the many museums around its perimeter. I found it in the bathroom of our hotel…

If you have stayed in a hotel in the last five or so years, you are likely to have seen the same sign hanging in your room’s bathroom or shower. It typically reads something like:

“Hotel X is concerned about the environment. Every time we wash a towel, a lot of water and detergent is used and poured down the drain into the environment. To help out, please re-use your towel more than once. Please leave a towel you would like washed on the floor and any you intend to re-use on the rack.”

Simple and easy. The likely reduction in towel usage does indeed cut down in water, electricity and detergent usage (rather, the resulting detergent run-off). But it also does something else — it saves the hotel money.

Fancy that. …a business case for CSR…

Every towel that a guest re-uses is one less towel that the hotel has to spend money and resources cleaning. Yes, the information cards hanging in the bathroom cost money and used up resources (I have yet to see one that has been printed on recycled paper, or labeled as such), but probably far less than the resources they save by prompting guests to be laundry thrifty.

Kudos to the hotels that have been implementing CSR in such a manner, and to those looking to extend the “save the towels” campaign to other areas of their operations.

(If the hotel chain is of interest, it was one of the several Embassy Suites properties in the city. The Westin that we spent the latter half of our trip in did not have a similar sign.)

TAGS: CSR | business | social responsibility | environment | Hilton | Embassy Suites

Via the Principled Profit, this news very interesting indeed: ISO Developing Social Responsibility Standard. Shel also posted a link to a PDF overview (image to the right) of how NGO’s can get involved in the process.

The text is indeed a bit dry as Shel points out, but the content, if you are interested in the topic, is quite interesting. In short, it is about the ISO 26000 standard which will “give guidance to organizations on social responsibility.” More specifically, the guidance will involve:

• principles and issues relating to social responsibility;
• integrating, implementing and promoting socially responsible practices;
• identifying and engaging with stakeholders;
• communicating commitments and performance relating to social responsibility; and,
• contributing to sustainable development through social responsibility.

I look forward to watching the standard come together.

TAGS: social responsibility | NGO | ISO 26000 | CSR

Wall Street’s relation to the horrible events that have been unfolding in Darfur may not be news to some, but for those of you who are unaware of the connection, or of what might be happening in Darfur, check our the following PDF: The Darfur Imperative:Working to End the Crisis.

If it seems like I have been focusing on Calvert a lot lately, it is because I have been. On the one hand, I find Calvert’s socially responsible investment options appealing and promising. On the other hand, I continually wonder if they are not fleshed out enough. For example, why a rating of 3 and above out of 5 to qualify as a potential investment option? Is that too generous (it does equate to a rating of 60% as the minimum bar)? And further, are the ratings according to an absolute measure (say the ideal company receives a 100% rating) vs. a relative rating in comparison to peer companies?

On the latter question, I have thought quite a bit about a more robust rating system and have also had a few interesting conversations regarding the same with friends and colleagues lately. Regardless of the fantastic rating schemes we may or may not have devised, the simple fact is that Calvert is serving a very important role. Here’s an interesting clip from the PDF linked above:

“On February 5, 2007, Calvert announced a new partnership with the Sudan Divestment Task Force (SDTF) and the Save Darfur Coalition (SDC) to mobilize collective pressure on the Sudanese government to stop the mayhem. Calvert will lend analytical expertise and leverage our advocacy network in support of these two organizations at the forefront of the Sudan divestment movement.”

I was not expecting that level of involvement… Continuing on, you’ll probably reach the content that seemed likely to appear:

“As part of our commitment, Calvert took a close look at our social fund portfolios to be sure we have no current investments in companies that are on the targeted divestment list maintained by SDTF.”

And the result? As expected, but still a result to be celebrated…

“Major multinational corporations are beginning to take notice of the divestment movement. For example, in January 2007, two of the world’s largest multinationals — ABB Ltd. and Siemens — announced their intentions to suspend operations in Sudan, with the exception of those consistent with the human rights and humanitarian objectives of the UN Global Compact.”

Also of note, Calvert has also set up a special report dedicated to the issues in Sudan.

And now the money question: What’s in your 401k? What’s in your IRA, or other investment vehicle? Do the funds or securities in your portfolio fit your values? Do they tie you to a company that is directly or indirectly supporting the atrocities occurring in Sudan? How about elsewhere in the world?

Socially responsible investing is important. It is important to consider your personal values when investing, but also the overall impact your investing choices can have. Here’s to Calvert for making the SRI investing process that much more transparent.

TAGS: Darfur | Sudan | Calvert | SRI

After my previous post I decided to look into a broader date range to determine the overall return of the fund in relation to the most common market indexes. To the right, click on the chart to see the maximum range I was able to produce (thank you Google Finance).

The resulting returns are interesting indeed. Not that any of the listed indexes produced the most phenomenal annualized returns during the period, but the Calvert Social Index, in comparison, did quite well.

Note that the chart range begins in April 2001, however, the Calvert Social Index has been around since late June 2000. If you know of a way to massage Google or Yahoo! Finance to produce the full range from June 30, 2000 to the present day, please let me know.

Take a moment and click on the chart to the right. The resulting enlarged version will display a five-year chart plotting the returns of the Calvert Social Index (CISIX) in comparison to the three leading US indexes (NASDAQ, S&P 500 and the Dow).

Of note, you will find that the Calvert Social Index runs in near lockstep with the S&P 500 and the Dow (the former has a slight 5-year advantage). The tech-heavy NASDAQ trounces the group, though a longer time frame (say 10 or 15 years) might prove otherwise.

So, are there any takeaways? I’d like to say that if you intend to invest in indexes tracking the S&P 500 or the Dow, you may as well invest in the CISIX as your returns will be comparable. Unfortunately, such a simplistic statement is somewhat naive, especially given that it would be solely based on a quick 5-year comparison. That said, the Calvert Social Index is a leading SRI fund and should be given strong consideration by investors seeking social responsibility in their investing activities.

If you are interested in reading more about SRI, here are a few relevant posts:

• SRI Overview & Calvert
• Effectiveness of SRI
• Motley Fool on SRI
• Vice Stocks
• SRI Article

TAGS: Calvert | CISIX | SRI | socially responsible investing