Business Respect - CSR Dispatches No#93 - 23 Apr 2006

An email newsletter with news and discussion focusing on corporate social responsibility globally, looking at the companies in the news and the emerging issues. Linked to the website at http://www.businessrespect.net and produced every two weeks.

This web page provides news stories and articles from the newsletters. Newsletters also include links to features on the internet, Mallen's blog, and other resources.

In this issue, we look at draft Principles of how business should respond to demands that they make their money responsibly.

Welcome

We know that there are increasing expectations on companies over their marketplace behaviour. How they develop products, how they market, how they source materials, all of these have been flashpoints for campaigners and for media criticism in recent years. What is less well understood is where the expectations begin and end. It is one thing to expect alcohol companies, for instance, to promote responsible drinking. But how liable can you actually hold individual companies for the choices that individuals may freely make about how to consume their products?

My own work within Business in the Community over the last year has been focused on how we create a business response to these challenges. The article for this issue is about the outcome - the draft Marketplace Principles. Have a look at it, and if it whets your appetite take a look at the full Principles document. I will be very happy to carry any comments on the draft, critical or otherwise, in the next issue and will feed them into the document formal consultation process. Over to you.

Of course, it can sometimes be difficult to be the object of critcism. Certainly, I didn't suppose that the Center for Sustainable Innovation would be overpleased with the review of the Social Footprint method, as covered last issue. As it turned out, this was something of an understatement. Mark W. McElroy came back with the following:

"The recent review by Mr. Mallen Baker of our Social Footprint method was so full of false and uninformed statements, I hardly know where to begin.

"A central theme in Mr. Baker's remarks seemed to be a devotion to certainty. Because actual conditions in society can never be known with certainty, he argued, we should all just declare defeat and forget about measuring corporate social bottom lines at all.

"We, of course, disagree. In fact, we stand on the principle of fallibilism. Certainty of knowledge is not only a fiction, there is no need for it in order to make progress. If everyone held to Mr. Baker's standards, nothing would ever get done.

"Another of Mr. Baker's specious criticisms was that the Social Footprint fails to take qualitative factors into account. What, if not a focus on qualitative factors, is a method that profiles the impacts of organizations on the well-being of society?

"In sum, Mr. Baker's critique of our method committed the worst kind of superficial journalism. I hope he and others who genuinely wish to understand the method, and not just savage it, will give it the more careful consideration it deserves."

Ouch. Mark actually gave more detailed comments, which I have responded to and are on the website at http://www.mallenbaker.net/csr/footprint.html. But having reviewed all of these, and trying to disentangle the argument of ideas from the namecalling, I stand by the original review. Ultimately, if you make the claims that 'true Triple Bottom Line measures can now be taken and reported for the very first time' you should expect the work to be judged on that claim, and as currently presented, with the examples used to illustrate the method, it does not deliver.

But the proof will be in the action. Ultimately, if the Social Footprint proves to be an effective tool for businesses to use, it will be used and I will have to eat my words. A good method can survive bad criticism.

Finally, I came across the new 'Swicki' community-based search engine recently. A 'swicki' search allows the users to promote or suggest removal of items that are returned in a search in a way that should, over time, mean that you get fewer / no irrelevant results, and the best results come to the top. It also enables you to draw first from websites known to be good quality sources for the information you're looking for.

I have created a Swicki for corporate social responsibility searches which you may want to try out. It is linked from the front page of the website, or you can go to it directly at http://www.mallenbaker.net/csr/swicki.html. Webmasters - if you want to include this search facility on your own sites let me know and I'll mail you the code (or just pull it from the search page on the mallenbaker.net site). If it is effective, this could prove to be a facility that services the whole community. Is it better than Google? They provide a 'compare results with Google' button just so you can check. Now that's confidence for you!

News

Body Shop image suffers from takeover

A BrandIndex survey has suggested that satisfaction ratings in ethical cosmetics company the Body Shop has slumped since the company was taken over by L'Oreal.

Australia: Amcor faces class action over price fixing

Packaging firm Amcor is facing one of the biggest Australian class actions over allegations of anti-competitive activity, including price fixing.

Merck loses latest Vioxx lawsuit: Fined $9m

Merck has been fined $9m after a jury in New Jersey, US found that its Vioxx painkiller had contributed to his heart attack.

Wal-Mart pledges not to open bank branches

Wal-Mart has promised the first public hearing held by the Federal Deposit Insurance Corporation that it will never open bank branches, following controversy over the firms suspected intentions.

Nigeria: Oil tax audit reveals huge gap

An audit of payments made by oil companies in Nigeria has uncovered huge discrepancies between the amount that the firms say they paid and what the government says it actually received.

ING Group rules out participation in controversial Uruguay pulp mills

ING Group has said that it will not participate in the controversial papermill project in Uruguay which has seen its World Bank funding frozen following unfavourable environmental impact assessments.

Enron: Jeffrey Skilling closes testimony

Jeffrey Skilling, the former chief executive of the company that has since become the byword for corporate corruption, Enron, has completed his eight day long testimony in court. The way is now clear for Kenneth Lay to take the stand next week.

Chad: Deadlines extended as World Bank and government seek solution

The government of Chad has extended its deadline for the direct payment of oil revenues before it carries out its threat to close down production. It says it has done this because it is now increasing in confidence that a deal can be done with the World Bank before the end of the month.

India: Prime Minister responds to Bhopal hunger strike

Manmohan Singh, the Indian Prime Minister, has brought a week-long hunger strike by survivors of the 1984 Bhopal tragedy to an end by meeting a number of their demands - but stopping short of agreeing to a prosecution of Union Carbide.

Japan: Kubota offers asbestos compensation to neighbours

Machinery manufacturer Kubota has said it will pay 46m yen to people who lost relatives to asbestos exposure, making it the first company to extend such support outside of its own workforce.

Article

In search of responsible market leadership

Author: Mallen Baker, dated 23 Apr 2006

Corporate social responsibility remains a disputed term, but increasingly it is now defined by how businesses make money, not just by how they give some of it away. What we have lacked to date has been any kind of framework to map out what the objectives of responsibility in the marketplace should be.

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