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Capitalism Rallies to Fight Climate Change

[fa icon="calendar'] Aug 4, 2015 9:26:52 AM / by Carol Pierson Holding

By: Carol Pierson Holding

Capitalism

In his op-ed piece “Two Cheers for Capitalism,” conservative columnist David Brooks quotes fellow New York Times writer Anand Giridharadas about why capitalism isn’t working:

“The rich are to be praised for the good they do with their philanthropy, but they are never to be challenged for the harm they do in their businesses. … Sometimes I wonder whether these various forms of giving back have become to our era what the papal indulgence was to the Middle Ages: a relatively inexpensive way of getting oneself seemingly on the right side of justice, without having to alter the fundamentals of one’s life.”

I wonder why Brooks considers this statement “courageous” and “provocative” rather than stating the obvious.

Indeed, in 2014, World Bank Economist Apurva Sanghi made the same argument for business and its own form of Papal indulgence: “CSR (corporate social responsibility) is about companies ‘giving back’ … How can companies that produce products that are polluting the environment have a strong reputation for social and environmental responsibility?’”

Sanghi slams some CSR as just another form of the “’guilt complex’ - charity as a means of managing a potential backlash.” And surely that happens, as he points out, with oil companies and big tobacco. But when a company makes an operational decision that’s good for society, you can bet it’s also good for the business.

And when businesses band together with competitors to address a societal ill, it’s because the very heart of capitalism is threatened, as it is with climate change.

Will capitalists step up to climate change for their own survival?

The evidence seems to say yes.

We’ve all heard about climate-caused business disruptions – think Hurricane Sandy in New York and rising sea levels along the East Coast. But climate change affects both  operations and consumer confidence.

The latest Yale/Gallup/Clearvision poll found 62% of Americans are convinced that “global warming is an urgent threat requiring immediate and drastic action,” indicating widespread fear.

Recall the stock market crash of 2008: when consumers are afraid, they don’t buy products and they don’t invest. As the impact of climate change gets worse, consumers may just stop spending. As temperature extremes worsen, they might just stay home.

And consumers are rewarding climate friendly companies by buying their products and their stocks.

The rest of business is jumping into action too.

Just a few days ago, the Huffington Post reported that eleven environmentally responsible corporations including Bank of America, Goldman Sachs, Walmart, and Apple joined Obama in "American Business Act on Climate Pledge." The purpose of the climate pledge? To support a "strong outcome" at the climate negotiations in Paris and commit to renewable energy, emissions reduction, responsible water use and halting deforestation.

Last year, even without the President’s backing, over 100 companies joined a coalition called We Mean Business to advocate bold action on climate change. Those companies were already climate leaders in their products (think electric cars and green investment funds) and operations.

We Mean Business now represents $2.19 trillion in members’ revenue and $7.4 trillion of investment.

Capitalism as practiced in 2015 America is a flawed system, distorted by years of legislation removing essential safeguards. But when it comes to climate change, capitalism might just be the most effective solution. Regardless of how weak you believe the connection is between profit and social responsibility, the connection between profit and public opinion has never been stronger.

Add to that the economic opportunities presented in the course of addressing climate change in both operations and consumer loyalty — opportunities such as Ikea discovering a solar gold mine in its massive flat roofs and the UK’s Marks & Spencer’s impressive gains in reducing carbon emissions while successfully relaunching its brand as the sustainable retailer — and you’re seeing capitalism at its finest.

Photo courtesy of Alessio via Flickr CC


Carol2Carol Pierson Holding is President and Founder, Holding Associates. Carol serves as Guest Blogger for CSRHub. Her firm has focused on the intersection of brand and social responsibility, working with Cisco Systems, Wilmington Trust, Bankrate.com, the US EPA, Yale University’s School of Environmental Sciences, and various non-profits. Before founding Holding Associates, Carol worked in executive management positions at Siegel & Gale, McCann Erickson, and Citibank. She is a Board Member of AMREF (African Medical and Research Foundation). Carol received her AB from Smith College and her MBA from Harvard University.

CSRHub provides access to corporate social responsibility and sustainability ratings and information on 15,000+ companies from 135 industries in 130 countries. Managers, researchers and activists use CSRHub to benchmark company performance, learn how stakeholders evaluate company CSR practices and seek ways to change the world.

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[fa icon="comment"] 0 Comments posted in American Business Act on Climate Pledge, Apple, Apurva Sanghi, Bank of America, capitalism, climate change, CSR, global warming, Goldman Sachs, Marks & Spencer, Uncategorized, Yale/Gallup/Clearvision, Paris climate negotiations, We Mean Business, Carol Pierson Holding, David Brooks, Ikea, WalMart

Apple’s New Corporate Citizenship Imperative

[fa icon="calendar'] May 6, 2015 9:59:30 AM / by Carol Pierson Holding

By Carol Pierson Holding

At the Apple earnings call last week, CEO Tim Cook reported Apple’s latest record-Apple Paybreaking results and the strongest March quarter ever, with 27% revenue growth and 40% earnings growth year over year.

Cook then commented on the two new data centers Apple is building which will run on 100% renewable energy, risking another conservative investor backlash when he linked them to Apple’s climate change politics: “This is just part of the work we’re doing to protect the environment and leave the world better than we found it.”

This took real chutzpah. Cook took a drubbing last year from conservative finance group NCPPR and its followers for spending on environmental projects not related to profit. Cook snapped back at critical NCPPR representative Justin Danhof, “If you want me to do things only for ROI reasons, you should get out of this stock.”

Tim Cook has become the passionate poster child for green electronics, touting environmental progress even with shareholders groups that may not be cheerleaders. And his operations department is implementing good works, eliminating emissions in new and existing Apple buildings, removing toxins from production and sourcing sustainable forests for packaging.

Just as important, Apple’s brand communications support its environmental efforts. Apple’s web site’s Environmental Responsibility touts both its green philosophy and its concrete actions. Cook intones on an Apple web video called “better” that “Climate change is real and a real problem for the world” and boasts that 94% of its corporate facilities and 100% of its data centers are now powered by renewable energy such as solar power.

Is Apple, now the world’s biggest company by market capitalization, finally leading corporate citizenship too? And doesn’t this just make Apple more vulnerable to environmental critics?

In fact, Apple is more vulnerable. An analysis in Huffington Post of Apple’s own 2014 report on climate change efforts reveals that “manufacturing (mostly in China) accounted for a whopping 73 percent of the company’s 34.2 million metric tons of greenhouse gas emissions.” Only 1 percent of the company's emissions are connected to its solar-powered headquarters and data centers.

Bloomberg’s Adam Minter recently attacked Apple for the same thing, noting that other companies like Boeing and GM already have factories powered by renewables. Apple is a laggard even among technology companies. Working with BSR, HP has developed energy-management action plans for 20 supplier factories in China. IBM now requires its nearly 20,000 suppliers to chart their emissions and energy consumption and develop plans for reducing both. Apple has joined the Electronic Industry Citizenship Coalition but has yet to announce specific targets. This suggests that Apple is engaged in, if not green-washing, then selective reporting.

Apple may be late signing on to corporate citizenship, but it’s just in time. The maker of Macs and iPhones has for years had success using fabulous design and cool chic to ride roughshod over environmental critics and techie complaints about closed systems. Now, the company is entering consumer payment systems (Apple Pay) and health care information (HealthKit), markets where trust is absolutely paramount. These products lock consumers into Apple for their money and their health, and what could be more personal?

Apple is selling to a generation whose purchases are, more than ever, guided by a company’s environmental actions. Six in ten 16- to 20-year-olds (“Generation Z”) say they will go out of their way to buy products and services from businesses they know are helping to create a better world, up from five in ten among Gen Y. And a post-2008 crash McKinsey study noted the widespread perception that financial services have violated their social contract with consumers, leaving space for a trusted source in consumer wallets. Apple needs creds as a corporate citizen to succeed in this new arena. An honest and aggressive commitment is required.

In Apple We Trust? See more on Cynthia Figge's chapter in the book Trust Inc. 

Photo courtesy of Darlo Reyes via Flickr CC


Carol Pierson HoldingCarol Pierson Holding writes on environmental issues and social responsibility for policy and news publications, including the Carnegie Council’s Policy Innovations, Harvard Business Review, San Francisco Chronicle, India Time, The Huffington Post and many other web sites. Her articles on corporate social responsibility can be found on CSRHub.com, a website that provides sustainability ratings data on 14,400+ companies worldwide. Carol holds degrees from Smith College and Harvard University.

CSRHub provides access to corporate social responsibility and sustainability ratings and information on 14,400+ companies from 135 industries in 127 countries. Managers, researchers and activists use CSRHub to benchmark company performance, learn how stakeholders evaluate company CSR practices and seek ways to change the world.

 

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[fa icon="comment"] 0 Comments posted in Apple, Apple Pay, Bloomberg, climate change, Electronic Industry Citizenship Coalition, Justin Danhof, iPhone, sustainable forestry, Uncategorized, iMac, NCPPR, solar power, toxins, Adam Minter, Carol Pierson Holding, green washing, HealthKit, investor backlash, renewable energy, Tim Cook

Harley-Davidson Signals Climate Change is Mainstream

[fa icon="calendar'] Jul 9, 2014 9:00:01 AM / by Carol Pierson Holding

By Carol Pierson HoldingWhat is going to solve climate change? To borrow terms from technology, a distributed motorcyclesolution is underway that has moved along the technology adoption curve and is already entering the mainstream.We’ve watched this distributed solution take form for a while now. Government regulation, which lagged at the federal level, is enacted globally at the city and community levels. Individual power plants are switching from oil and coal to the lower-emissions solution, natural gas, on their own and without regulation. Corporate Social Responsibility, which was isolated in its own department, has in many companies been distributed across the enterprise, with CSR departments providing only specific support functions like competitive benchmarking, measurement and reporting.How do we know our distributed solution has reached the mainstream? Harley-Davidson, whose brand is arguably nonexistent without a combustion engine, just introduced an electric motorcycle. The dominant brand in motorcycles, Harley sells 36% of all motorcycles sold in the U.S., including 52% of all on-highway bikes.  It has a well-entrenched formula for customer loyalty that includes its unique sound. That’s so important that the company tried to trademark it, only giving up in 2000 after six years of legal wrangling.But Harley’s core customers are largely boomers so its average customer’s age — and as recently as 2010 its market share too — were declining.The company needed to appeal to younger generations. It’s doing so with an electric motorcycle called the LiveWire.How does a company capitalize on one of the most beloved parts of an electric vehicle, its silence, when your brand is synonymous with deafening noise? By creating a brand new sound. As Charles Fleming wrote in the Los Angeles Times’ last week —

“The (Livewire) debut marks a dramatic departure for the 110-year-old motorcycle company, which is hailed or hated for its powerful engines, loud exhaust pipes and brash rebel attitude. … It accelerates like a ballistic missile and sounds like a jet engine turbine.

As LiveWire designer Kirk Rasmussen said, "People get on this thinking 'golf cart,' but they get off it thinking 'rocket ship."” …That should appeal to younger male riders in particular, while the electric aspect should appeal to younger riders of both genders, who tend to be more sensitive to enviromental  (sic) matters.

There are many more dramatic innovations happening in emerging companies, like mushroom architecture described last week in Huffington Poststunning structures that grow themselves and are completely recyclable. But there are just as potentially meaningful changes in existing product lines from industry leaders, such as J.P. Morgan Chase’s bond funds for green projects.Environmental efforts under the CSR rubric are also advancing. Most stunning for those of us who follow Apple Computer and its storied founder Steve Job’s rejection of social responsibility is new founder Tim Cook’s embrace of “better” ideas for reducing its environmental footprint. Stock market website SeekingAlpha reports on Apple’s change of heart:

The company was one of Greenpeace's Do Not Buys for a long period of time. Yet in the past year Greenpeace has been applauding Apple for eliminating toxic materials, materials in conflict areas, and setting a bar in 2014 for climate leadership. The company is now using 100% renewable energy at all data centers, which is setting the bar in the tech space.

These solutions are most remarkable when you realize they are happening independently, across industries, across companies, even when the innovations appear to undercut a successful, established brand, as in the case of Harley-Davidson.From companies to individuals to institutions, everyone seems to be a part of the distributed solution. Conservative government and business leaders advocate climate change action in a just released report “Risky Business.” Millennials are moving away from private car ownership. And Harleys may soon sound like jet engines…or nothing at all.

LiveWire photo courtesy of: Christine Cotter/The Orange County Register/ZUMAPRESS.com


Carol Pierson HoldingCarol Pierson Holding writes on environmental issues and social responsibility for policy and news publications, including the Carnegie Council's Policy Innovations, Harvard Business Review, San Francisco Chronicle, India Time, The Huffington Post and many other web sites. Her articles on corporate social responsibility can be found on CSRHub.com, a website that provides sustainability ratings data on 8,900+ companies worldwide. Carol holds degrees from Smith College and Harvard University.

CSRHub provides access to corporate social responsibility and sustainability ratings and information on 8,900+ companies from 135 industries in 102 countries. By aggregating and normalizing the information from 325+ data sources, CSRHub has created a broad, consistent rating system and a searchable database that links millions of rating elements back to their source. Managers, researchers and activists use CSRHub to benchmark company performance, learn how stakeholders evaluate company CSR practices and seek ways to change the world.

 
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[fa icon="comment"] 1 Comment posted in Apple, corporate social responsibility, CSR, LiveWire, Uncategorized, JP Morgan Chase Green Bond Funds, mushroom architecture, RiskyBusiness.org, technology adoption curve, Carol Pierson Holding, CSRHub, Greenpeace, Harley-Davidson

Read Cynthia Figge’s chapter in Trust, Inc. …Hot New Release on Amazon!

[fa icon="calendar'] Oct 21, 2013 9:40:27 AM / by CSRHub Blogging

Trust, Inc.Cynthia has joined many thought leaders in Trust, Inc.: Strategies for Building Your Company's Most Important Asset, edited by Barbara Kimmel.  Trust, Inc., steady on the Hot New Release list on Amazon, includes powerful essays by thought leaders like Stephen M. R. Covey & Greg Link, Patricia Aburdene, Amy Lyman, Jim Kouzes & Barry Posner, Lolly Daskal, Bob Whipple, and many others.

“Business must also address real needs and be compassionate and sustainable,” says Figge, who wrote the In Apple We Trust? chapter focusing on Apple's new stated direction in regards to transparency and supply chain.

Learn from the experts through dozens of case studies, real world situations, models and examples...a must have for your leadership development collection.

Get your copy today!


Cynthia FiggeCynthia Figge is a forerunner and thought leader in the corporate sustainability movement. She is COO and Cofounder of CSRHub, the world’s largest database that aggregates and organizes data and knowledge on the social, environmental, and governance performance of 8,400 companies to provide sustainability ratings to the marketplace. In 1996 she co-founded EKOS International, one of the first consultancies integrating sustainability and corporate strategy. Prior to founding EKOS, she was an officer of LIN Broadcasting / McCaw Cellular, and led new businesses and services with Weyerhaeuser, New York Daily News; and with New Ventures. Cynthia is Board Director of the Compassionate Action Network International. Cynthia received her bachelor's degree in Economics and an MBA from the Harvard Business School. She lives in the Seattle area.

 

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[fa icon="comment"] 0 Comments posted in Apple, Barbara Kimmel, Cynthia Figge, trust, Stephen M. R. Covey & Greg Link, Uncategorized, Lolly Daskal, Trust Across America, Inc., Jim Kouzes & Barry Posner, Patricia Aburdene, Amy Lyman, Bob Whipple

Is This the “Era of CSR”?

[fa icon="calendar'] Jun 11, 2013 9:42:30 AM / by Carol Pierson Holding

By Carol Pierson Holding

This week, Cynthia Figge, Co-founder and COO of CSRHub (full disclosure: CSRHub is my sponsor), reported at Sustainable Brands that the correlation between CSR and brand strength has reached .28. (A perfect correlation is 1.0)

This number is truly remarkable!

First, look at it in absolute terms. In 2006, I organized the first study that proved a relationship between CSR and brand existed at all.  That study was considered such a breakthrough that I was invited to present the results at all the major sustainability conferences, from the Conference Board to SRI (Socially Responsible Investing) in the Rockies to the Wharton Sustainability Conference. All that excitement over a small, but significant relationship – a .05 correlation.

That 2006 study – conducted just six years before the CSRHub study – barely qualified for statistical significance. So the fact that the CSR/brand correlation reached .28 so fast is a very big deal. Of course, we used different databases back then. CSR outside the US wasn’t being tracked by US firms so our numbers were domestic only. The CSRHub study combined global data from Brand Finance, the UK brand value company, and CSRHub’s aggregated global information. Still, the rise was extraordinary.

In fact, so unbelievable that CSRHub’s CEO Bahar Gidwani, a self-admitted geek with degrees in physics and astronomy and a Harvard MBA, tested every permutation of statistical error. The numbers hold.

Look at the above chart again. 2012 jumps one and one half times over 2011. This is after years of languishing. Was 2012 the tipping point? If so, why?

After waffling around during the grim days of recession and climate change denying, something pushed us into a new age of CSR.

Maybe it’s just that CSR has finally traversed the natural path of innovation. The numbers from 2006 to 2012 form an almost perfect hockey stick-shaped graph of innovation adoption, starting from the 20 years or so before 2006 with consistently low level of “innovators,” increasing over five years through the “early adopter” phase and now blasting into the “mainstream.” But why now?

Figge reported on the subcategories that carried the higher correlation. As expected, environmental factors had robust correlation due to the ubiquity of sustainability reports and environmental crises. But employee issues exerted an even stronger influence. Social media accelerated the impact of greater employee engagement and the accompanying word-of-mouth.

The relationship between social media and the growing influence of CSR on brand is underscored in a recent study from Cone Communications titled “Social: Where CSR Brand Leadership Is Won Or Lost” which says —

“Social media is transforming the CSR landscape… Citizens are universally taking to social channels to learn more about issues, share positive and negative information and influence their personal networks.”

They call this conversion of CSR and social media “The Era of CSR.”

I would argue that something else is also at play: a shift in culture from one tilted towards competition and force to one based on co-operation and kindness. Thanks to the environmental movement, our perspective is becoming longer-term and focused on preserving the commons, or the natural resources that we all share, rather than competing for them.

Evidence of the shift is most apparent in the younger cohort. We’ve seen acts of violence drop by half since 1994 among 10-24 year olds. GenY is showing a preference for the “sharing economy” in industries from cars to hotels to homes. David Brooks wrote last week about a young hedge fund trader who lives on a grad school budget and sends the rest off to Africa to find a cure for malaria.

Shifts in older cohort culture are also becoming apparent. In a much-praised book called “The Athena Doctrine: How Women (and the Men Who Think Like Them) Will Rule the Future,” author John Gerzema concludes that “…the only way to succeed when everyone knows your business is to act in an empathetic, patient, humane, and scrupulously ethical way” — traits he ascribes to being “like women.”

Even Apple, once the poster child for a winner-take-all American corporation and the one activists loved to hate, has undergone a dramatic shift. As reported in this week’s Fortune, “Ma Jun, the noted Chinese environmental activist, says Apple has gone in a short period of time from being the most uncooperative of electronics companies to ‘one of the most proactive IT suppliers’ of all.”

[csrhubwidget company="Apple-Inc" size="650x100" hash="c9c0f7"]

Surely “The Era of CSR” is upon us.


Carol Pierson HoldingCarol Pierson Holding writes on environmental issues and social responsibility for policy and news publications, including the Carnegie Council's Policy Innovations, Harvard Business Review, San Francisco Chronicle, India Time, The Huffington Post and many other web sites. Her articles on corporate social responsibility can be found on CSRHub.com, a website that provides sustainability ratings data on 7,300 companies worldwide. Carol holds degrees from Smith College and Harvard University.

CSRHub provides access to corporate social responsibility and sustainability ratings and information on 7,300+ companies from 135 industries in 93 countries. By aggregating and normalizing the information from 230 data sources, CSRHub has created a broad, consistent rating system and a searchable database that links millions of rating elements back to their source. Managers, researchers and activists use CSRHub to benchmark company performance, learn how stakeholders evaluate company CSR practices and seek ways to change the world.

 

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[fa icon="comment"] 1 Comment posted in Apple, Bahar Gidwani, CSR, Cynthia Figge, Ma Jun, sharing economy, sustainability reports, Sustainable Brands, Uncategorized, Brand Finance, Brand strength, Carol Pierson Holding, CSR/brand correlation, David Brooks, employee engagement, environmental crisis, John Gerzema, The Athena Doctrine

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