The poisoned pill: make money or save lives?

In an interesting article Mallen consider the huge CSR challenge that pharmaceutical companies face in Africa against the background of the Aids epidemic. Make money or save lives?

How to combine patient relief and profit-driven business practices in a context of poor countries with weak health infrastructures?

There has already been gone a lot of action and thinking into this. Just consider the two what the MSF campaign Access to Essential Medicines has done and said with respect to that.


Focusing and advocating for exclusively on more research for rare diseases the DNDi website - the Drugs for neglected diseases initiatives - is worht a visit.

It is obvious that there is need for more debate, thinking and committement to progress towards a better way to deal with this huge challenge. I am quite sure that this issue will push CSR even more on the agenda of top-management and develop the thinking and practises of CSR - at least within the pharmaceutical industry. Next opportunity for this, will be in september at the international expert conference in Basel: "Access to Life-Saving Medication". The conference is organized by the Basel Institute on Governance.

No time for CSR

Businesses are owned by their shareholders - any money they spend on so-called social responsibility is effectively theft from those shareholders who can, after all, decide for themselves if they want to give to charity.

On of the arguments against Corporate Social Responsiblilty on Mallenbaker.net

The site proposes to think about the arguments in order to find the best responses. Definitely a good exercise. The central error in the above argument is, that investing in CSR is not simply giving money away to charity. Managing an enterprise is managing relationships with multiple stakeholders, relationships that can strongly influence - on the long-term - the "licence to operate". These relationships can be expressed under the concept of reputation. For instance, consider the case of Coca-Cola, where its "Reputation"- the market-capitalization - exceeds by far the "property value" of the Company. In particular, in case of Coca-Cola, where about 96% of its value is made of intangibles, the argument goes on.

Read other arguments.

NGOs returning to Activist roots?

An interesting post on Edelman blog on whether US NGO's are maturing or returning militant roots. Of course, the background is an survey carried out by the Edelman agency, but still very intersting... as you can read...:

"In Edelman/Harvard/IBLF survey of Fortune 500 companies, global NGOs, global media and institutional investors, all agreed that MNC should view less-developed markets as an opportunity to grow market and increase shareholder value.

There are a few issues for business to consider in this environment:

1) Is a company ready to make a long-term commitment? There is no easy exit strategy once you are committed.

2) Can the company outline a plan to self sufficiency for the social actors? For example, Rajiv Gupta of McKinsey eloquently described a plan to increase the supply of health workers in India, which began with a think tank on public health to affect public policy, creating institutes for public health and making health a respected and desireable profession.

3) Can the company identify its areas of core competence (logistics, marketing, management) and how it can work along side NGOs who do the actual service delivery (note that companies are not credible actors in public interaction and are too vulnerable to political pressures). "

Employees first!

Rethinking CSR - US perspective

The results of a new CSR survey from Fleischman and Hillard are out. In there you find the surprising figure of almost 30% of respondents who assess CSR of an organization based on how well they treat their employees. Only about 3% referred to donations as being the most important sign of CSR. Should american charities start to worry...

Download the Executive Summary of the survey.

Most important influencers on CSR in UK

Discovered this interesting study on the stakeholders influence network on the debate on CSR. The analysis focus on the question of "who are the most important influencers on CSR in the UK?".

Influence is when people listen to what you say or read what you have said.

It's on the basis of such information (citations, references, articles etc...) available in the Public Domain that Onalytica.com has calculated the influence of stakeholders on the CSR-debate. The most important influencers come not surprisingly from the business and the political arena.

The most important three sources quoted in the study are:
1. www.bitc.org.uk
2. www.csr.gov.uk
3. europa.eu.int

You can download the summary

Good question: Is Fair Trade a Quick Corporate Fix?

Can Fair-Trade certification prematuerly undermine the real public pressure for real change? A recent survey referring to Nestlés Fair Coffee Partner Blend showed that two thirds of respondents - of whom about 80% were Nestlés boycotters - thought that the certification meant that the whole company had been audited for Fair Trade Practices!

Of course, this is not the case.

Companies should be careful not to be seen in the eyes of the public as to foster such misconceptions on purpose. If too many people - for whatever reason - belief the wrong things, this could build up another future backlash.

With respect to Fair Trade, companies should apply transparent and full communication strategies. It would be very doubtful and short-sighted trying to benefit from such misconceptions.

See original post...

Ethical Investing on CSMonitor

Where Capital meets Conscience

Today, I discovered 'Ethical Investing', a very interesting section on the site of the csmonitor. Webcasts and a Ethical Market Monitor Index and many interesting informations are available. Though, most of them obviously US-centered. Howeveer it seems worth to spend some time on it. Among others, the section offers in December:

- If ethical dollars can change manufacturing and banking, can they improve the media, too?

- Why corporations now must compete on social and environmental issues

-A seal of approval for companies' social progress

Social Capitalist Awards 2006

Introducing the 2006 Social Capitalist Award winners--25 entrepreneurs solving the world's toughest problems with creativity, ingenuity, and passion. Because they can't stand a vacuum.

The entrepreneurial mind abhors a vacuum. Market failures, unmet demand, even the maddening lure of a blank napkin--all beckon as explicit invitations to invent. What defines an entrepreneur (as well as an entrepreneurial organization) is that relentless problem-solving approach, not the specifics of the problem itself.

We typically associate such ingenuity with the transformation of problems into lucrative, shareholder-enriching companies. But the winners and nominees of the Social Capitalist Award 2006, a joint effort by Fast Company and Monitor Group, the global consulting firm, belong to the cream of entrepreneurial organizations in the social sector.

Like their counterparts in the profit-driven world, our 25 winning organizations--winnowed from 278 nominations with the help of 43 experts--are masters at envisioning products and services that don't yet exist, marshaling resources, and crafting solutions that deeply affect their customers. The results these nonprofit organizations deliver hinge on business acumen and often reflect strategies that their for-profit brethren would do well to imitate.

Earl Martin Phalen, the founder of winner BELL (Building Educated Leaders for Life), came face-to-face with his inspiring vacuum while still a student at Harvard Law School. Phalen and several classmates volunteered for a mentoring program in Roxbury, Massachusetts. He remembers telling the kids, most of them from low-income African-American and Latino families, that anything was possible, including going to college. But when he and his law-school buddies sat down to help the students with homework, they realized the kids were years behind academically. "We left there really devastated," he says.

Read on to know what he and others made out of such insipring vacuums.

Trust is declining

A global public opinion survey carried out for the World Economic Forum in 20 countries, interviewing more than 20,000 citizens, paints an alarming picture of declining levels of trust. The survey, carried out by GlobeScan, shows that trust in a range of institutions has dropped significantly since January 2004 to levels not seen since the months following the 11 September 2001 terrorist attacks. The poll also reveals that public trust in national governments and the United Nations has fallen the most over the past two years.

Want to read more

CSFB gets fire from environmentalists

One of the big swiss financial institutions, Credit Suisse, gets criticism because it serves as financial advisor to one of Shell's oil project in Sakhalin Island, Russia's Far East and home to the world's last population of critically endangered Western Gray Whales.

Protest sparked off from US (RAN, Pacific Environment) to Switzerland (Greenpeace). The issue has also been commented by some swiss bloggers.

Will CSFB take up the issue and react? Will they consider whether this project respects their business ethics or not?

With regard to Shell - for them the challenge is ongoing. In one of the previous posts (Accountability Rating 2005) you will notice that the Oil companies made it to the top: the Royal Dutch Shell Group succeding to be ranked number 2, behind BP. Will they reconsider this project?

Where does the business need to stop? A tough line to draw...

The Geography of Corporate Giving

A new US study shows the geographical location of Company Headquarters influences the types of social programs it sponsors.

On HBSWK you can read an interesting interview with Christopher de Marquis, one of the authors of the study.

He suggests that there are three main factors that influence corporations to follow locally established patterns: 1) what is encouraged and supported by government, 2) what peers are doing locally, 3) what is believed 'right'.

Accountability Rating 2005

European firms do better than their US competitors

The Accountability Rating tool is a temptative to measure which businesses align their strategies with society's needs, and which are paying only lip service to their responsibilities. It was developped by the csrnetwork and AccountAbility, a UK-based thinktank.

Their summary of this years' result:

The average overall score among Fortune Global 100 companies has risen from 24 in 2004 to 32 (out of a maximum of 100). One-third of companies achieved a score of 40 or more, compared with only one in ten in 2004.

The range of performance across the Global 100 is wide, stretching from only one point to a top score of 78. In general, scores remain disturbingly low. The results suggest that few of today’s biggest companies are as smart as they might be. The gap between the leaders and the laggards raises important questions about the latter’s ability to manage their risks and opportunities.

Read more

Competency Framework

The CSR academy let's you download its Competency Framework as free pdf. It's objective is to help you integrate CSR in your organisation and provides a set of core characteristics to help managers to integrate responsible business decision-making.

Roche and its heavy burden with Tamiflu

Another interesting article from Ethical Corporation on the huge responsability faced by Roche with its anti-flu drug Tamiflu.

Though they have learned some lessons from past experiences with AIDS-drugs, a mistake in handling supplies could have fatal consequences for the company's reputation.

Read article...

Nestlé's move into Fairtrade

Nestlé recently announced to produce a fair trade coffee. A columnist from the 'Ethical Corporation' on Nestlé's difficulty to get acceptance for that...
Read more here

Looking for a quick fix - Social Audits no help

The guardian on a report arguing that a majority of social audits are missing violations of workers' rights. A recommendation from the report is to place workers and unions at the centre of the auditing process and makes the case for a more comprehensive approach.

Positive mentions of well-known brands as Gap, Nike and Reebook.

Read the article of the Guardian

The report from the clean-clothes campaign

They don't know what they are negotiating

Intellectual property rights and wrong

An interesting confession made by the economist and nobel laureate Joseph E Stiglitz: he admits that the diplomats did not know what they were doing when they negotiated the TRIPS* agreement during the Uruguay - Round.

[* (trade related aspects of intellectual property rights)]

"I suspect that most of those who signed the agreement did not fully understand what they were doing. If they had, would they have willingly condemned thousands of AIDS sufferers to death because they might no longer be able to get affordable generic drugs? Had the question been posed in this way to parliaments around the world, I believe that TRIPS would have been soundly rejected."

The only thing they knew, he is saying...

"it was clear that there was more interest in pleasing the pharmaceutical and entertainment industries than in ensuring an intellectual-property regime that was good for science, let alone for developing countries."

But it is exactly here where the debate on CSR has to start: . Ethics vs Profits, how to combine Social Responsibility with market objectives. It's a difficult challenge..

But, let's hop that WIPO [World Intellectual Property Organization] will succeed when trying to build a more development oriented IP regime. At least, it is on their agenda now.

Read Stiglitz yourself:
http://lists.essential.org/pipermail/a2k/2005-August/000555.html

or in German:
http://www.ftd.de/me/cl/19245.html

Doing Well by Doing Good 2005:

Corporate citizenship turns consumers into brand champions

After the various scandals that destroyed much of the credibility that Corporate America had once, it takes time to rebuild trust. Golin Harris recently published its national Corporate Social Responsibility Survey 2005 and comes to think that the worst might be over and that there could be a glimmer of hope on the horizon of Corporate America. After Enron & Co., it was not surprising that americans took time before trusting their business leaders again. Not surprising either, that US business now leads the way and fights the battle to win back the confidence of consumers, clients and shareholders: The introduction of new Corporate Governance regulations, new accounting standards and impressive CSR-policies are the result.

And does it start to pay off? It might do so actually.

Here you find the Executive Summary of the study

Nestle - Corporate Governance under pressure

The Nestle case is another good example that even on such a big multinational company external pressure is showing impact. Public opinion forms reputation and reputation is intangible but influences the stock prize.

It all started with the Annual Shareholder meeting where CEO, Mr. Brabeck, was succeding Rainer Gut as the board chairman and by doing that was holding a double mandat. A 'sin' according to widely admitted good governance principles. But there was some opposition, a small shareholder - the Ethos Fund and its manager Mr. Biedermann - started to organize the fight for good governance at Nestle. However, it was a kind of David against Goliath play.

Of course the Goliath, Mr. Brabeck, was not worried at all by this small David, Mr. Biedermann. He seemed just furious, arrogant and threatenend to step down if someone dared to contest seriously its double mandate. [Read the summary of the NZZ, 13 April 2005]

In the end, the shareholder assembly accepted - but only temporarily! - the double mandate of Goliath. However, surprisingly, more people in the assembly then expected were backing the fight of David. And it looked a lot as if Mr. Biedermann will get more support next time.

Afterwards, it seems as if there were some people having an open and honest word with Goliath, warning him that being too arrogant with little Davids could end up with some serious problems. And there were changes: Nestle is now surveying its shareholder to get their opinion on good governance!

Bravo David Biedermann! This is a promising start.
Interested readers can find David under ethosfund.ch

Fade, Integrate or Transform ? The future of CSR

A very interesting paper written by Allen White, Senior Advisor, BSR! He envisions three scenarios for the CSR movement by 2015: Fade, Integrate or Transform . In the same times, it gives you the history of CSR in a nutshell.
Up to us and the business leaders to choose which of the scenarios should become reality. At the end he summarizes the core challenge of CSR very well in this words:

The core question facing companies is how to harness the full potential of business to serve the public interest while preserving and enhancing core assets — creativity, innovation and competitive drive.

The 10 pages paper can be downloaded here