Environmental Markets: Opportunities & Risks for Business - from BSR

How much are well-functioning environmental services like flood control and climate regulation worth to a company's bottom line? BSR has released a new Environmental Markets Trends Report in conjunction with launching an initiative that will help companies assess the risks and opportunities of emerging markets in carbon, water quality and biodiversity. BSR has already convened a number of multi-sector dialogues among policy makers, companies, researchers and market brokers. Companies taking the lead in this field are beginning to see increased real estate value, consistent and high-quality supplies of raw materials, more cost-effective environmental management, cheaper cost of compliance and regulatory "goodwill."

Companies and community service - who benefits?
BusinessWeek has an article on companies who encourage execs to get some "field" training by doing community service. The article was brought to my attention through a note i received from BuildingBlocks International. Jennifer Anastasoff, who is the ED for BBI, is a champ - she runs this very lean organization that encourages companies to do this very thing...and imagine the perspective, insight and energy an employee would have after coming back from one of these excursions.

"We pay a heavy price for our fear of failure. It is a powerful obstacle to growth. It assures the progressive narrowing of the personality and prevents exploration and experimentation. There is no learning without some difficulty and fumbling. If you want to keep on learning, you must keep on risking failure - all your life." - John W. Gardner

David Batstone has a site (blog?) called The Right Reality...great commentary on CSR, corporate stakeholder relations, etc. One of his editorials is titled Where CSR Gets Stuck, and if you work in this field, or care about it, you should read this.

Study: Financial Leaders Have Strong Values Statements
Here's an overview of a study done by Booz Allen (which is pretty committed to corporate responsibility themselves) and the Aspen Institute. It states that 98% of big financial companies have integrated wording on ethical behavior or integrity into their mission statements. I don't know, but i think it's kind of a croc...it's not hard to put that into a mission statement, especially when your buddies from the fraternity of Dom Perignon-swilling CEOs are all doing perp walks at the behest of Eliot Spitzer. my point is that words don't carry any meaning unless they're put into action. i should know - i've been a marketing and "corporate communications" guy for quite some time now. see for yourself in the report.

Economist article on CSR
i love The Economist. it's insightful and (mostly) logical in it's analysis. they recently took on CSR in an article titled, "The good company - a survey of corporate responsibility". the article took a dim view of the field, and i can't say i totally disagree...that's mainly because CSR as a field doesn't try to apply it's value to what most corporate stakeholders are looking for - when you know the question will be, "what can you do for me?", you should be prepared to answer something that will help a CEO look good (and better) when she talks to shareholders. then again, however, i think the Economist just doesn't take the filed too seriously, which is why they decided to dump on CSR. some organizations are fighting back (a la howard dean, perhaps?):
- Business for Social Responsibility takes the Economist to task - good for them
- A European organization called Business Human Rights has a number of responses

Alliance Magazine - Getting Global Philanthropy Going
anyone seen Alliance Magazine? lots of thought-provoking stuff, and here's an article that makes a case for HOW to encourage global philanthropy. i'm not sure exactly what differentiates "global" philanthropy from just plain ol' philanthropy, and they don't spend much time explaining it. but it's refreshing to see the case made to change policy to encourage it. if policy - in fact, sweeping, massive policy - based on concepts like supply-side and trickle-down economics can be made into society-changing laws, there's absolutely no reason why the same thing (although on a much, much smaller scale) can't be done for philanthropy. i use those examples from economics because when politicians advocated policy that was based on them, it was always in the form of - "if we make these changes now, look at all the wonderful results we'll all have. we have no evidence to support it, but we're all really smart economists, so we know it'll happen. sort of."...well, i'll make the case that philanthropy is far more rational than economics (although the two are tied), so even wild conjecture at what "might" happen is worth trying. at least, i think it is...

Socially Responsible Investing?
Even for a bleeding heart like myself, I've always thought that socially responsible investing was a surefire way to lose money. Not so, it turns out. These funds are doing well and beating the major indices. A new survey by Harris Interactive also indicates that investors put more trust into firms that are socially responsible - this is key for anyone involved with corporate/community relations, CSR, etc...it gives some financial justification (especially when that's what the exec audience wants before they'll bless - and fund - any serious attempt at CSR) to why a company should act as a good citizen. NB: even though Harris did the study, it looks like it was commissioned by the Calvert Group, one of the country's largest socially responsible mutual funds.

Study: Corporate Giving and Community Relations
In largest project of its kind to date, "The Survey of Corporate Community Relations" examines over 3,000 corporations in 50 of the largest U.S. metropolitan areas. The survey explores business decisions and practices in the areas of social responsibility, and especially the ways firms align themselves with and support local governments and non-profit organizations through their community investments. Funded by the Ford Foundation, the study was conducted by Dr. Doug Guthrie of New York University and The Social Science Research Council.

Reebok's Human Rights Awards Winners
Since 1988, Reebok honors activists under the age of 30 who "have made significant contributions to the field of human rights through nonviolent means." Pretty impressive that the company awards these people with $50,000 to help them continue their work. This year, the winners include three women - one from Nigeria, one from Brazil, and an American. More info...

Australia Sets “World’s Toughest” Standards for Socially Responsible Investment Disclosure
Ethical Performance reports that the Australian government has introduced the “world’s toughest disclosure requirements” on socially responsible investments (SRI) by requiring all companies that offer investment products to disclose whether socially responsible factors were considered, and if so, to detail the methodology and systems used to weigh these factors. The article reports that while similar disclosure rules exist in other countries, Australia's standards are the first to require an explanation that applies to a broad range of investment products, including pension funds, life insurance and managed funds. In comparison, U.K. SRI disclosure rules apply only to pension funds. The new Australian guidelines state that the more an investment product is marketed as an SRI product, “the more detail you have to give about the standards of issues you have regard to and how they are employed.” Specifically, companies will need to disclose whether they consider labor standards and environmental, social or ethical factors in making investment decisions and the steps the fund managers take in applying SRI standards. The regulations were developed by the Australian Securities and Investments Commission.
-- From Ethical Performance, March 2004, P.4

U.S. Banks Partner with Community Nonprofit Groups To Reach Lower-Income Customers
The Financial Times reports that several large U.S. banks have formed “unlikely alliances” with nonprofit community activist organizations in order to target potential long-term customers in lower-income areas. These communities have traditionally been overlooked by banks as areas that could potentially yield profitable opportunities. The nonprofit groups, which include the Neighborhood Assistance Corporation of America (Naca), provide credit counseling and personal finance education to prospective immigrant and minority customers, thereby ensuring that the banks have reliable lower-income borrowers. Although it is working with the banks, Naca asks the borrowers it finds to take part in five advocacy “actions and activities” each year, which could include demonstrations against financial institutions. The article reports that Bank of American Corp. (BofA) and Citigroup Inc. are two banks that are working with Naca and other community groups. Bruce Marks, chief executive of Naca, says the organization receives $2,000-$2,500 for each low-cost mortgage that it helps the banks arrange. Marks notes that Naca’s agreements with BofA and Citigroup could bring in tens of millions of dollars for his organization. According to Ajay Banga, Citigroup’s president of retail banking in North America, “I believe this is a new channel for connecting with consumers.”
-- From the Financial Times, March 11, 2004

Do drug companies care about more than profit?
here's a summary of a Financial Times article about how drug companies are gradually doing more to actually deliver cost-effective treatments to developing countries. i dunno...i don't totally buy it:
Trend: Drug Companies and NGOs Join Efforts To Develop Drugs for Developing Nations
The Financial Times reports that non-governmental organizations (NGOs) and pharmaceutical companies are increasingly working together to ensure that more powerful drugs are produced for developing nations to combat treatable diseases. According to the article, pharmaceutical firms lack the financial incentives to produce drugs for the developing world, making these types of partnerships necessary. For example, the Times reports that in the last 30 years, no new drugs have been created to fight tuberculosis (TB) – a treatable disease that killed 2 million people in 2003. The article notes that several nonprofit drug companies – including U.S.-based One World Health – have been formed to develop the new drugs once initial research is completed by for-profit drug companies. One World Health chief medical officer Ahvie Herskowitz says, “As long as someone has done the discovery work, we can do the whole development ourselves.” Several drug firms have responded by increasing their research efforts. AstraZeneca plc and GlaxoSmithKline plc have opened new infectious diseases laboratories and Novartis AG has set up a research institute to analyze TB and dengue fever. Novartis executive Paul Herrling says, “We have realized that we cannot ignore what is going on in the tropics.”

Study: Loans to Low-Income Communities Not Riskier than Conventional Loans
A study by the National Community Capital Association – a U.S.-based trade group for community development financial institutions (CDFIs) – finds that while the average rate of “net charge offs” (or uncollectable debts) for loans from U.S. commercial banks was 0.97 percent in 2002, the rate for CDFI loans was 0.7 percent. According to American Banker, this finding questions the common perception that loans to low-income communities are riskier than conventional loans. The article reports that the trade group conducted the survey in hopes of attracting more community development investors, including traditional financial institutions. The study examined 138 U.S. community development loan funds, venture capital funds and credit unions that together control $3.1 billion in capital. Jane Henderson, director of community development investors at U.S. financial services firm Wachovia Corp., supported the study’s finding, noting that Wachovia uses the same risk parameters to evaluate all of its investments. “Community investing just makes good sense. It strengthens our business and creates economic opportunity for our investors,” says Henderson.