Business Respect - CSR Dispatches No#79 - 12 Dec 2004

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 consider whether business can provide the answer to poverty through treating those at the 'bottom of the pyramid' as more viable consumers

Welcome

The 20th anniversay of the Bhopal tragedy has reminded us all of the consequences of the worst examples of corporate irresponsibility. Thankfully, although there have been many problems and disasters during those last 20 years, there have been no events on the same scale of human misery and suffering as that inflicted on the unsuspecting citizens of Bhopal. Whether this is a reflection of rising standards or just dumb luck is a key debating point.

Of course, the smaller tragedies destroy the lives, hopes and futures of people as well - and the movement to hold business accountable for its impacts in operations across the world continues to grow. This will be a key focus for the anti-corporate campaigners, as probably it should be. But there is something faintly depressing about the UK CORE coalition's recent attempt at a Parliamentary Bill, which seeks to hold all companies to account for the 'negative impacts' of their operations overseas. There is no suggestion there that the standard day to day practice of business may have positive impacts as well - in most cases providing a balance of impact that should be judged objectively. The worst cases provide plenty of ammunition for such views - but for these to provide the full context for evaluating the role of business is plain wrong.

In actual fact, if you look at regions of the world that were recently underdeveloped but are now thriving, it is the development through business activity that has played a key part in bringing about the transformation. C.K. Prahalad has gone further, and argued that business can play a much more direct and radical role in transforming the lives of the 'bottom of the pyramid' section of the population - those that live on 2 dollars a day or less. We give a review of some of these ideas in this issue.

Thanks to all those Business Respect readers that introduced themselves to Mallen during the BSR conference in New York last month. It was great to talk to so many different committed people working across the spectrum, and very gratifying to get all the messages of support and encouragement to keep producing this newsletter! You will notice we are studiously avoiding promises about getting the regularity of production back on track until this has been achieved - but all the encouragement helps to boost the determination!

The standard editorial email addresses have been under siege for some time now - experience suggests that if we even mention the phenomenon responsible a number of corporate firewalls will bounce the issue back for 'content violations' - and this has meant we know that we have missed some legitimate emails. We have now implemented filtering on the main account, but this doesn't seem to do more than skim the lightest percentage off. In the melee, it is clear that we do, from time to time, accidentally delete messages that we shouldn't. So we are reviewing what to do about this, and apologise to anyone that may have been affected. All we can suggest at the moment is that if you include CSR or 'Business Respect' in the email title, it will help us to spot that it is legitimate email in amongst the hundreds of junk messages.

The vote on the website has now had by far the largest number of people participating of any vote so far. You will recall that it goes:

The rising obesity problems in many countries will best be solved by:

New legislation to force food companies to reform their ways
198 (15 percent)

People taking personal responsibility for themselves and their families - we don't need people telling us how to live our lives
459 (34 percent)

All organisations, public and private sector, working together voluntarily to change behaviour
674 (51 percent)

1331 people have voted in total. Many thanks to all of you.

We are now changing the vote. More companies are producing social and environmental reports than ever before - but at the same time there are still complaints that the quality of such reports is variable, and their value is unproven. We thought we would take the opportunity to see what you think!

The new vote now reads:

The quality of Corporate social responsibility reports:

Is good - they generally have the information I need
Is variable - more robust quality standards are needed
Is poor - they don't meet my needs at all

As ever, these votes are only indicative, and we won't exercise ourselves unduly about all the possible variations of answers that could be possible to such a question!

News

IT companies to collaborate on code of conduct working group

Cisco Systems, HP, Microsoft and Intel have announced the formation of a new working group to focus on supply chain implications of the recently announced Electronics Industry Code of Conduct.

UK: Many employees do not understand concept of CSR

According to jobs site Monster, 84 percent of employees either don't understand the concept of corporate social responsibility, or are unsure whether their company has any kind of active programme.

Ireland: Corporate practice celebrated in first CSR awards

The first awards for corporate social responsibility have been presented in Ireland by the Chambers of Commerce of Ireland.

US: Federal Trade Commission warns on misleading health claims

The Federal Trade Commission has sent letters to nine media companies telling them they must stop publishing adverts for products that have been the target of law suits recently for falsely claiming to guarantee weight loss.

Japan: Fujichiku chairman arrested over mad cow scare

The chairman of meat wholesaler Fujichiku, Yoshiharu Fujimura, has been arrested alongside six others on suspicion of fraudulently receiving more than 300m yen in subsidies following the mislabelling of beef.

Indonesia: Newmont pollution accusations fueled by new report

High concentrations of heavy metals have been discovered at the bottom of a bay which has been the centre of allegations of pollution by Newmont Mining Corp.

India: Cola companies told to disclose product contents

The High Court in Rajasthan has dismissed a petition from PepsiCo and Coca-Cola against a directive that will require them to list the full contents of their products.

Starbucks aiming to boost environmental and social standard of coffee

Starbucks has said that it intends to considerably strengthen the environmental and social standards it expects of its coffee suppliers as it grows over the coming few years.

UK: Food and drink advertising aimed at children declines

In the face of controversy around the growing incidence of childhood obesity, the number of food and soft drink adverts aimed specifically at children has dropped by 20 percent.

Malaysia: Companies lack awareness of CSR potential

Malaysia's major companies show little evidence of awareness of corporate social responsibility, with only one company so far having reflected its social responsibilities within its corporate mission, according to ACCA Malaysia.

Australia: Amcor accused of collusion

Amcor required the former chief of its cardboard box division, James Hodgson, to be involved in systematic collusion in breach of the Trade Practices Act, according to allegations made by Mr Hodgson in the Supreme Court.

Indonesia: Court refuses to bargain with Newmont over pollution case

Newmont Mining Corp will have to defend itself in court over the major Buyat Bay pollution allegations, Indonesia's environment minister has announced. Six of the company's executives have indictments against them in a case that now should be filed early in the new year.

China: Government cancels OECD meeting on workers' rights

The Chinese Government has cancelled a meeting of union and business leaders scheduled to take place which was to have reviewed how multinational companies should adopt standards around the rights of workers in China. Visas for those expecting to attend the event were cancelled.

Gap granted top slot for social report in Business Ethics Awards

Gap has won the Business Ethics Awards category for social reporting for "taking social reporting a quantum step forward by risking unprecedented honesty in reporting on factory conditions".

Article

Profitable poverty alleviation creates a ‘new frontier’ for corporate responsibility

Author: Mallen Baker, dated 12 Dec 2004

Last week, the Financial Times carried a story about how GrupoNueva aims to target the world’s poor as a potential market by aiming to design and sell affordable wood and water pipeline products to this vast segment of the world’s population. The company, it said, was aiming to show how profitability and corporate responsibility can go hand in hand.

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Special Feature

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Social responsibility and finance - on the precipice

In a recent article, the BBC's economics editor Robert Peston highlighted the fact that in 2012 the chances are that the economy - punch drunk as it is from the various flavours of debt crisis it has been pummelled with over the course of the year - will be hit by the collapse of a major bank and / or government.