Blog: Top Corporate Social Responsibility News of 2008

bb1Each January for the past several years, Bill has surveyed the top Corporate Social Responsibility news stories of the past year for CSRwire.com, where he is a contributing writer. Here’s this year’s edition:

A “green” recovery from economic and environmental meltdowns; the advent of Shareholder Activism 2.0 with binding resolutions at TARP banks; CSR adopts Web 2.0 strategies for sustainability reporting; is Wal-Mart really green?; and much more…

The economic meltdown of 2008 mirrors the simultaneous environmental meltdown fueled by the climate calamity – both share common roots, and many in the Corporate Sustainability and Responsibility (CSR) community believe they share a common salvation. At the most basic level, the global economy is melting down because the belief in perpetual growth, propped up by deregulation and outright fraud, has smacked up against the finite nature of reality. Likewise, our atmosphere is literally melting our ecosystems, primarily because of the growth curve of fossil fuel emissions and carbon concentrations. Market signals and science tell a similar story: we’re driving off a cliff. The most likely savior scenario likewise entwines economy and environment: a “green” recovery promises to create good jobs and strong companies while transitioning to a low-carbon energy infrastructure powered by renewable resources such as wind and solar.

Reports from academia, NGOs, and business support this storyline. In September, University of Massachusetts Professor Bob Pollin of the Political Economy Research Institute (PERI) testified before the House Select Committee on Energy Independence and Global Warming on the Green Recovery report he co-authored with Bracken Hendricks of the Center for American Progress (founded by Obama Administration Transition Head John Podesta). Among other things, the report finds that green stimulus will create four times more total jobs than a stimulus invested in the oil industry. Later that month at the United Nations, Worldwatch Institute Senior Fellow Michael Renner presented the Green Jobs report he authored for the United Nations Environment Programme (UNEP) with similar findings that “a global transition to a low-carbon and sustainable economy can create large numbers of green jobs.” In November, Deutsche Asset Management’s Climate Change Investment Research team punctuated these findings with a paper appropriately entitled Economic Stimulus: The Case for “Green” Infrastructure, Energy Security and “Green” Jobs.

Al Gore, a hero in the 2007 and 2006 editions of the CSRwire Top CSR Stories, features prominently again this year. In July, he issued the Renewable Energy Challenge to source all (as in 100 percent) domestic electricity from renewables within a decade. Then in September at the Clinton Global Initiative, Gore urged civil disobedience against the construction of new coal-fired plants, a call echoed in December by Bill McKibben and Wendell Berry. Perhaps even more radical was the defection of T. Boone Pickens from a lifetime as an oilman to a wind enthusiast with the Pickens Plan (he couldn’t bring himself to completely abandon fossil fuels, though, retaining support for natural gas.)

Promises of a green recovery are tempered by the severity of economic downturn, an irony all too apparent for sustainability activists who for years had been warning of systemic economic — and environmental — instability. As early as 1993, the Interfaith Center on Corporate Responsibility was filing shareholder resolutions raising red flags on predatory subprime lending, as well as resolutions on obscene executive compensation and obscure derivatives as problems persisted. (Not long after, ICCR began filing resolutions on global warming.)

Now comes “Shareholder Activism 2.0,” with the advent of resolutions seeking binding bylaws amendments, since shareholders have suffered so deeply from their companies ignoring “precatory” (or advisory) resolutions urging economic responsibility. SRI firm Harrington Investments filed binding resolutions at Troubled Asset Relief Program recipient firms Bank of America ($10 billion in TARP funding) as well as Citi and Goldman Sachs (both $25 billion) seeking board-level accountability for economic security (think “the opposite of million dollar bonuses and government bailouts.”) Amazingly, BofA and Citi petitioned the SEC for permission to omit these resolutions from their proxies – which begs the question of exactly what accountability these companies believe should accompany their bailout (apparently, “none.”)

Luckily, some companies are using Web 2.0 tools and social networking platforms to enhance their accountability and transparency. In March, Patagonia launched the Footprint Chronicles, a website disclosing the full social and environmental impacts of their product supply chains. Drawing on the wiki model of crowd-sourcing, Patagonia urged its customers to provide feedback and suggestions on how to improve the sustainability of their sourcing. In June, Timberland went a step further by migrating its sustainability reporting to JustMeans, a socially responsible social networking website. Timberland is reporting there on a quarterly basis, and hosting quarterly stakeholder dialogues on sustainability issues, such as the October dialogue on responsible sourcing.

In November, the Business & Human Rights Resource Center (BHRRC) launched an ambitious web-based resource on corporate human rights lawsuits around the world, only to find the project in jeopardy when its major funder, the JEHT Foundation, folded because it concentrated its assets in Bernie Madoff’s portfolio, which turned out to be a Ponzi scheme. The site remains up, testament to its tenacity — and the need for such information.

Business and human rights was a busy intersection in 2008, with the 60th anniversary of the UN Universal Declaration of Human Rights falling in December. In the leadup, BHRRC and Realizing Rights teamed up to encourage companies to pass governance policies assuring human rights protections. This campaign pushed the number of such companies up from under 200 to over 230. The year also marked the reappointment of Harvard Professor John Ruggie to the position of Special Representative of the UN Secretary General on business and human rights, his mandate extended an additional three years.

If 2007 was the year of coffee and CSR, with Starbucks and Oxfam America tousling over Ethiopian trademarking of its regional names, 2008 was the year of cocoa, with the launch of the International Cocoa Verification Board under the secretariat of Verité. The Board is charged with ensuring compliance with the Harken-Engel Protocol, the agreement between the US Congress and the cocoa industry to curtail child labor in West African cocoa fields. The International Labor Rights Fund joined with a group of other NGOs and fair trade cocoa purveyors to criticize the lax enforcement of the Harken-Engel Protocol, with the industry re-negotiating for only half of the cocoa fields to be certified as free from child labor, instead of the original 100 percent promised in the agreement.

Child labor was also the focus of attention in Uzbekistan after a consortium of socially responsible investors and NGOs called for an end to forced child labor in Uzbekistan in August. A month later, Wal-Mart lent its voice to the call by instructing its suppliers base to cease sourcing cotton from Uzbekistan in an effort to persuade the Uzbek government to end the use of forced child labor in cotton harvesting. “There is no tolerance for forced child labor in the Wal-Mart supply chain,” said Rajan Kamalanathan, vice president of ethical standards, a stance applauded by the SRI consortium.

Wal-Mart also continued its greening by sourcing food more locally and increasing its commitment to 100 percent renewable energy by upping its wind purchases. On the other hand, despite promises to reduce carbon emissions, the company’s Carbon Disclosure Project report reveals a continued rise in emissions this year, and in late December the company settled 63 lawsuits across the country to the tune of at least $352 million (“and possibly far more” according to the New York Times) for forcing off-the-clock work. Wal-Mart is working very hard to deliver on Lee Scott’s assertion last year in the company’s 2007 Sustainability Progress report of “being a more sustainable business.” What remains to be seen is if Wal-Mart can remove the “more,” to become a truly sustainable company. Indeed, this is the question before the entire CSR community, and the world: can we veer from driving off the cliff and instead achieve true sustainability?

About Bill Baue: In addition to being a contributing writer for CSRwire, Bill Baue Co-Hosts/Produces Sea Change Radio, the new name of Corporate Watchdog Radio, which he co-founded in 2005 with Sanford Lewis (who helped strategize “Shareholder Activism 2.0.”) Baue also teaches in the Marlboro MBA in Managing for Sustainability. He has written on sustainability for the United Nations, the Worldwatch Institute, The Economist, Ceres, the Investor Environmental Health Network, and Wal-Mart. He is currently co-producing a podcast series for the Interfaith Center on Corporate Responsibility with Sea Change co-host Francesca Rheannon.