Friday, March 24, 2006

What is the full mission for responsible corporations?

Is the only mission of the corporate world to make money for shareholders?

Corporations are human endeavors, and all human endeavors should benefit our society and reflect our morals. They should provide more than just investor return.

There are many ways that corporations do benefit society:
  1. They provide jobs
  2. They produce goods and services that people want
  3. They provide a return to investors

But corporations must in addition meet a higher moral standard:
  1. To minimize activities that harm life or the environment
  2. To be truthful
  3. To bring joy to life and reduce suffering, even if in very small and mundane ways
  4. To stop encouraging people's craving or addiction
The World Moral Movement has a collaborative effort to define corporate responsibility based on morals shared by all religions and secular philosophies. The above views are based on the World Moral Movement Corporate Responsibility Wiki page, which is open for further discussion and debate.

Friday, May 27, 2005

Corporate Responsibility and Competitiveness

The business case for Corporate Social Responsibility has been debated for many years. In a survey of the subject, Roger Cowe from Royal Dutch/Shell Group finds that while links to national and regional competitiveness are less clear, governments and think tanks are enthusiastic about the idea.

It looks like a no-brainer: if there is a business case for corporate social responsibility and enough companies take it up, that will make whole economies more competitive – so governments should be encouraging corporate social responsibility in pursuit of national economic strategies. But brains are needed.

Quite apart from the “ifs” in this argument, there are plenty of uncertainties:

  1. Does the case for corporate social responsibility apply to all kinds of company?
  2. Can benefits aggregate across an economy or is it a zero-sum game?
  3. Does it introduce inefficiencies when scaled up to the level of the economy as a whole, as classical economics would argue?

It is increasingly common to talk about the triple bottom line at the level of the economy rather than the firm. Read on...

Wednesday, March 16, 2005

Study reveals CR importance growing in decision-making

After the accounting scandals, governments have introduced new legislation, new codes of conduct have been developed and corporate boards have been 're-balanced' to include more independent members.

The over-riding goal in every case has been to restore investor confidence. However, these changes have also brought with them the realisation that good governance is a key topic not only for shareholders but also for a much broader set of stakeholders, including customers, employees, suppliers and the wider community.

That in turn has made the term corporate responsibility (CR) much more familiar than ever before in boardrooms across the globe. The line is far from solid, but CR can be seen as the extension of governance beyond simple compliance to embrace broader social values.

A recent survey from the Economist Intelligence Unit, produced in cooperation with Oracle Corporation, reveals that more business executives and corporate investors are factoring corporate responsibility into their decision-making. Read on.

Thursday, February 17, 2005

Prahalad and Corporate Responsibility

In his important new book: The Bottom of the Pyramid, management guru C.K. Prahalad recommends a private sector and market-based approach for fighting world poverty.
I wonder do we agree as Corporate Responsibility Forum that:
  1. The poorest people should become an integral part of the work and of the core business of the Private Sector?
  2. The Bottom of Pyramid markets cannot merely be regulated to the realm of CSR initiatives?

Wednesday, December 29, 2004

Bestselling Corporate Responsibility Books

Award for Excellence for Cause Related Marketing

"Businesses across the UK are being invited to enter the Business in the Community's Awards for Excellence 2005, in association with the Financial Times, sponsored by the Department of Trade and Industry, supported by Marks & Spencer, Company of the Year 2004. The categories include the Dollond & Aitchison Cause Related Marketing Award which recognizes, rewards and celebrates programmes when businesses have used the power of the brand in partnership with charities or causes to address key social issues.

Last year's Award was won by BT for its partnership with ChildLine. Blockbuster Entertainment was Highly Commended for its partnership with Starlight Children's Foundation.

Cause Related Marketing is defined by Business in the Community as “a commercial activity by which businesses and charities or causes form a partnership with each other to market an image, product or service for mutual benefits. It is an additional tool for addressing the social issues of the day through providing resources and funding whilst at the same time addressing business marketing objectives.

The Business in the Community Awards for Excellence are the most prestigious UK awards recognizing companies for integrating responsible business practice into their mainstream operations resulting in a positive impact in the workplace, the marketplace, the environment or the community. Now in their eighth year, they are the primary means by which Business in the Community identifies, celebrates and communicates good practice in corporate responsibility.

Further information about Business in the Community and the Award can be found at the website

Friday, December 10, 2004

Five maturity stages of CR

Simon Zadek provides a useful best practice five-stage maturity model of how organizations deal with CR (HBR Dec04 - 'The Path to CR')
  1. Defensive: deny practices, outcomes or responsibilites ("It's not our job to fix that")
  2. Compliance: adopt a policy-based compliance approach as a cost of doing business ("We'll do just as much as we have to")
  3. Managerial: embed the societal issue into core management processes ("It's the business, stupid")
  4. Strategic: integrate the societal issue into core business processes ("It gives us a competetive edge")
  5. Civil: promote broad industry participation in CR ("We need to make sure everybody does it")

Tuesday, September 14, 2004

Oil Companies ranked on CSR

Independent investment research firm Innovest Strategic Value Advisors ( has released the latest of its sector-based assessments of how companies perform on CSR. The report ranks 33 companies in the oil and gas industry.

Companies that received the highest ranking include Norsk Hydro, BP, Suncor, and Royal Dutch/Shell.

Companies that received the lowest rankings include Yukos, PetroChina, Marathon, and Surgutneftegas.

The report discussed escalating climate change risk, access to resources, C. governance scandals and the shift towards new, lower impact products.

Innovest used its proprietary EcoValue 21 environmental rating methodology to assess the relative environmental performance, or "eco-efficiency," of the 13 companies. The rating is based on more than 60 different aspects of environmental risk, opportunity, and management, including positions on climate change, renewable energy, fuel cells, natural gas, emissions, and social management in international operations.

Thursday, September 02, 2004

Dow Jones Sustainability Index

Today the new composition of the Dow Jones Sustainability Index has been announced.

SAM today announced the results of the annual review for the Dow Jones Sustainability Indexes (DJSI). Effective with the opening of equity markets on September 20, 2004 the Dow Jones Sustainability World Index will again include over 300 companies from 24 countries that lead their industries in terms of corporate sustainability. The pan-European sustainability benchmark – the Dow Jones STOXX Sustainability Index – will include 167 companies from 13 countries. Both indexes will continue to closely mirror the sector distribution of the corresponding mainstream equity benchmarks.

The annual review of the DJSI family is based on a thorough assessment of companies’ economic, environmental and social performance and accounts for more than 50 general as well as industry specific criteria in each sector. Its results will influence the investment decisions of asset managers in 14 countries who have licensed the DJSI family as objective benchmarks and underlying for a variety of sustainability-driven portfolios. In total, these licensees currently manage close to 3 billion EUR in DJSI-based funds, structured products, segregated accounts as well as an exchange traded fund that is listed on Euronext.

Launched in 1999, the Dow Jones Sustainability Indexes track the financial performance of the leading sustainability-driven companies worldwide. Based on the cooperation of Dow Jones Indexes, STOXX Limited and SAM Group the indexes provide asset managers with reliable and objective benchmarks to manage sustainability portfolios. The Dow Jones Sustainability World Indexes DJSI World) cover the top 10% of the biggest 2,500 companies in the Dow Jones World Index in terms of economic, environmental and social criteria. As a benchmark for European sustainability investments, the Dow Jones STOXX Sustainability Indexes (DJSI STOXX) cover the leading 20% in terms of sustainability of the companies in the Dow Jones STOXXSM 600 Index. The Dow Jones EURO STOXX Sustainability Index (DJSI EURO STOXX) is the Eurozone subset of the DJSI STOXX and, thus, tracks the financial performance of sustainability leaders in this particular region. The selection of index components follows a rules-based process defined in the DJSI Guidebooks. It is based on a thorough assessment of general and industryspecific sustainability criteria. The analysis is verified by an external auditor. Full details about the design philosophy, review methodology and index components are freely available at

Thursday, August 26, 2004

IR and CR

In an interesting though far from simple article, Will Barret (Research Fellow with the Centre for Applied Philosophy and Public Ethics at the University of Melbourne) explains that the notion of CR dominates business ethics, in education and in practice. The relationship between the moral R. of corporations and that of their individual and collective members is an ongoing philosophical issue, ultimately riding on theories of moral agency. Whether corporations possess moral agency or not, C. activity undeniably has morally significant effects. In the article Barret discusses moral R. and how it gives rise to accountability. He then outlines the connection between R. and moral agency, and associated theoretical difficulties. Barret finally gives 5 reasons why corporations can be accountable without necessarily being able to make rational decisions:

  1. First, and perhaps a little facetiously, Barret recommends you look at some C. mission statements. They invariably mention the corporation's aims, commitments, and activities. They talk as if the corporation has the properties required for rational decision-making.
  2. Second, we describe systems and processes as rational in cases where no individual or collective could have produced the outcome.
  3. Third, allowing that only the members of corporations have the required capacity, C. accountability might emerge from individual capacity, without being reducible to it. The idea that corporations are accountable doesn't require a theory of C. agency, but rather a causal history.
  4. Fourth, corporations satisfy whatever is required to meet the demands of legal accountability, so we already have a sense of C. accountability.
  5. Fifth, and finally, a corporation can be morally accountable for some state of affairs without having the capacity for rational-decision making, as long as people who possess that capacity can meet the demands of accountability on behalf of the corporation. Those people may themselves not be morally responsible for the relevant state of affairs.

Read Barret's full argumentation