Should business leaders speak out more on public issues?

Business leaders are among the most powerful people on the planet. At the helm of huge corporations, with billions of dollars of assets to leverage, their decisions have a profound influence on all of us. At the same time, however, those very same business leaders only very rarely seem to speak out on many of the public issues that actually affect us.

Consider when the former Toronto Mayor Rob Ford was engulfed in a crack-smoking scandal that put the city in the headlines for all the wrong reasons. The response from the city's business elite was a deafening silence. Nonetheless, the scandal must have prompted considerable anxiety among business leaders about its effect on the business and investment climate of Canada's largest city.

Are CEOs right to hold back in such instances or should we expect them to take a more prominent position in public debates? There are no black and white answers to this; it largely depends on context. So here are four things to consider when deciding whether the silence of business leaders in good thing or not. And if you want to dig deeper, check out The Guardian's live chat on "Should business leaders speak out more on public issues such as climate change?" on Wednesday 5 August 2015, 1-2:30pm BST.

1. Some social issues face a leadership vacuum that business leaders can help fill
Earlier this year, a group of 43 CEOs of major multinationals signed a open letter urging governments to strike an ambitious climate deal at COP21 in Paris, Likewise, the CEO of the biggest oil sands producer, Suncor, recently called for more stringent climate regulation, including a high price on carbon.

These announcements, unthinkable even a decade ago, give at least some indication of the kind of muscle that business leaders might be able to flex in filling the great big hole in leadership around climate change. Quite simply, such signalling from the business community helps empower political leaders to do their jobs better.

Of course, if these CEOs had spoken out saying that no action on climate change was needed (despite all the evidence to the contrary), as indeed has happened in the past (most notably from successive Exxon-Mobil leaders), we would be bemoaning the addition of their voices into the debate. So it's a double-edged sword, with substantial risks as well as opportunities.

2. Hypocrisy won't work
There is a tendency to criticize business leaders for making pronouncements like these because their actions do not always match their impressive sounding words. Richard Branson for example, was branded a hypocrite by Naomi Klein for failing to follow through on his promise to divert $3bn of Virgin's revenues to developing biofuels and other clean energy projects.

"Greenwashing", as this is known, can be a major problem when companies and their leaders go public with grandiose plans that they either cannot deliver on, or that they actively undermine behind the scenes with lobbying and back room deals. Business leaders already face a major trust deficit when it comes to their credibility as spokespeople. Survey after survey has confirmed that CEOs and business executives in general are not trusted as a credible source by the public. So any attempt to hoodwink the public is unlikely to work, not least because most of the public don't believe them in the first place.

3. Aspirational talk isn't all bad
For all the problems of greenwashing, business leaders making aspirational statements about social issues shouldn't automatically be criticized. For one thing, in the context of challenging, complex problems, it is often imperative that business leaders do go outside their comfort zones and articulate "stretch" goals that they can not necessarily know if or how they can achieve. Consider Interface Carpet's mission to reduce their waste to zero by 2020. When they started their 'mission zero' journey in 1994, former CEO Ray Anderson did not have a plan for how this would be realized only that he needed to set a vision that was inspiring enough to galvanize the entire company. Since then, Interface has cut waste to landfill by more than 90% and GHG emissions per unit of production are down almost 75%. The company is rightly lauded as a sustainability leader that others should follow. The lesson is that there is scope for business leaders to be aspirational but sooner or later they need to back up their words with sustained action.

4. There is surprisingly little risk attached to CEOs speaking out personally on issues not directly connected to their company. 
Business leaders rarely take the plunge and speak about public issues not directly tied to their business. Despite being smart, influential people used to tackling complex problems, they are usually either too busy or too concerned about prompting a backlash to say publicly what they think about such issues. The silence really is deafening. But according to unpublished research conducted at the Schulich School of Business last year, when CEOs do take the plunge, there is rarely any kind of negative media response. Looking back over a number of years across a range of issues such as Obamacare, same sex marriage, the fiscal cliff, the Rob Ford scandal and the proposed Quebec secular charter, the mainstream press reaction to the rare instances of individual CEOs speaking out has been largely neutral. This suggests that corporate leaders may well be overestimated the risks associated with speaking out on public issues, especially those where their own self-interest is less obvious.

The bottom line is that business leaders could probably be part of the conversation on a whole swathe of public issues. But if they are to participate, it has to be in the right way, and that means three main things: a) transparency about what their company stands to gain or lose with respect to the issue (i.e. is it a matter of self-interest or not?); b) clarity about what they or their company is doing or planning to do to address the issue (i.e. are they open to a charge of hypocrisy?); and c) a willingness to encourage others, especially those without such power and influence, to also participate - and to engage fairly in the unfolding debate rather than seeking to dominate it. It's a tall order. But if nothing else, it might help earn back a bit of that trust in business leaders that is so sorely lacking .

Photo copyright Onewaystock.com. Reproduced under creative commons licence

A ‘Sweet Spot’ in tackling climate change?

Today (Monday April 28, 2014) Jeremy Oppenheim was in Toronto. Oppenheim is the director of the  Global Commission on the Economy and Climate (chaired by former Mexican President Felipe Calderon, co-chairs include Lord Nicholas Stern and the OECD Secretary-General). He was hosted by Corporate Knights’ Toby Heaps for a 'high level' lunch which included some of the top brass of Toronto’s investment, real estate, insurance and academic communities. And civil society, of course, David Miller (ex-Major of Toronto and now Head of WWF Canada) was there, too.

It was, first off, a real game changing experience to see a room of 30ish ‘climate activists’ in pinstripes (or female equivalent) convening over antipasto e bistecca to discuss the plight of the planet. Oppenheim's remarks were thought provoking as they reflected the current gist among those leaders that care seriously about climate change.

Oppenheim started by highlighting that the public debate has somewhat stalled as most of conversations on climate change evoke pretty unsexy, depressing and un-cool truths. Going on and on about threats linked to climate change just makes you a boring party pooper.

At least in person – he was all but. Eloquently, engaging and thoughtfully he relayed his core points. What struck me most is that amongst the experts, the entire debate about ‘avoiding’ or ‘fighting’ climate change is yesterday’s news. Oppenheim stated clearly that – in my words - we just have to suck it up that temperatures are about to rise by two degrees. The damage is done. Today’s debate is really about how to avoid global warming to reach three or even four degrees. A sobering – and somewhat chilling assessment.

Oppenheim – no less a McKinsey director on leave from their London offices – then pointed to the currently explored strategy - which hopefully can become a game changer: highlight the 'positive' side of climate change (in my words). Or to put it this way: adapting to climate change can already make economic sense now! He ran through a couple of examples from many places around the globe. Here is just one: Deforestation in the Brazilian Amazon region has been identified as a great worry. What we see now though is that land owners in the Amazon are increasingly sympathetic to restrictions on turning rain forest into farm land: after all, the unlimited possibility of creating new farmland through cutting the forest decreases the value of their property. According to Oppenheim, those economic drivers are a huge force in favor of climate friendly policies.

It is interesting to see that a group of top business people is having this discussion. In the Canadian context, many of these will be laughed out of their Golf Clubs or seven star resorts in the Caribbean if they ever repeated to their buddies what they heard today. Canada, Oppenheim intimated with the maximum level of British politeness, is a real mess with regard to climate change action. So Oppenheim’s point was really that we have to change the story, change the way we communicate about it. Present it as a story of opportunity, rather than a story of threat. While Lord Stern’s report years ago was telling us ‘Pay a little now and you avoid being taken to the cleaners by climate change tomorrow!’ Oppenheim’s new message is: ‘You can actually make money on adapting to climate change NOW!’

I left the event with a somewhat ambiguous feeling. I was uplifted to see key players in business – from where most of the sources of carbon emissions are ultimately governed – acutely aware of the problem. I also liked the pragmatic gist of Oppenheim’s argument: We can use the current incentive structure in one of the most powerful engines of capitalism to ‘move the needle’ (I have to watch my language…) on pressing global issues. And - fair enough - there is some leeway.

At the same time, the by now worn out quote from Albert Einstein kept creeping up on me on my way home: “We cannot solve our problems with the same thinking we used when we created them.” A focus on short term economic gains for individual actors or organizations got us into this mess of climate change in the first place. And – we have to add – has prevented any large-scale meaningful response to date. So finding that ‘sweet spot’ (a quote from Jeremy Oppenheim’s McKinsey Website) where business interest and environmental needs converge may take us some way. But there can be little doubt that this is not going to really change the bigger picture.

DM

Photo by Tyler Hamilton/Corporate Knights.

The top 5 CSR trends for 2013

For years now we have summed up the main events of the past year in our end-of-the-year post. Before we are too far into the New Year we thought we should also ratchet up the game a little by sharing our two cents on what the future might hold in store for the world of CSR. In doing so we are partly inspired, partly informed by other players in the CSR world, such as ethical corporation magazine, BSR or just means, albeit our outlook is neither as gloomy nor as rosy as some of our colleague’s. Here is what we think business should watch out for in 2013 when it comes to CSR:

Trend 1: Governments are back!

One of the basic tenets of the CSR movement in business has been it being voluntary and meeting social expectations above and beyond the law. Well, that sounded good and no doubt many companies have done well in this regard. But after four years of ongoing (and new) financial crises all over the world and some of the more recent scandals it is also fair to say that business has enjoyed a rather long leash over the last decades, thanks to deregulation and globalisation. The fallout of the tax evasion scandal in the UK or the BP disaster in the US however have shown that governments are no longer all that happy to just take ethical business behaviour on trust alone. It’s no longer just carrots – the sticks are back out. After four years of virtually no prosecution of any Wall Street bankers responsible for the financial crisis, Obama has just appointed a former star prosecutor as the head of the SEC – for many a sign of a more ambitious control of Wall Street. And it is not just in the US where a second term president can now (hopefully) govern without too much concern for special interests. At this week’s Davos meetings UK Prime Minister David Cameron – the self declared most ‘pro business leader’ you could find – announced more coordinated efforts within the G8 to clamp down on the blatant tax evasion we have witnessed in the past.

What does this mean for CSR? In some ways it is good news for those companies who are serious about their CSR. After all, if ethical behaviour is just voluntary, the more responsible ones face those ‘first mover disadvantages of CSR’: if you are the only one that does not bribe, that does pay taxes or decent wages in Africa – your competitors will get the contracts, lower their costs and outcompete you. Companies therefore in some ways have an interest in levelling the playing field through regulation. The smart ones have understood this and rather than lobbying against it understand that they can be part of the solution. An example for a promising initiative in this context is the ‘Council of Clean Capitalism’ set up by the Canadian CSR magazine Corporate Knights which brings businesses together in creating a broader regulatory system that incentivizes responsible behaviour at a systemic level.

Trend 2: Make-or-Break on Climate Change!

Cancun, Copenhagen, Durban, Doha – the spate of UN Climate Change Conferences aimed at finding a successor of the Kyoto Protocol have so far led to nothing and are considered by many as a sick joke. Much of it to the ‘credit’ of business hampering and obstructing progress in many ways, as a recent study exemplifies. This said though, it does not mean that Climate Change is off the agenda for business. On the opposite, in accordance with Trend 1 above, we see that many national (i.e. Australia), regional (i.e. California) or even municipal (i.e. the C40) jurisdictions are moving on the topic with, yes, regulatory systems, be it cap-and-trade, carbon tax or other approaches.

For business this is not necessarily the best outcome. While global agreements provide a long term framework for adapting to the issue business now is confronted with a patchwork of approaches, systems and jurisdictions. With considerable regulatory activism in the area this enhances uncertainty and risk. This will be exacerbated by the fact that events like Hurricane Sandy (causing even Mike Bloomberg to acknowledge climate change as real!) make the effects of climate change more palpable. This area of CSR is just going to be a major issue on the 2013 agenda.

Trend 3: Beware of CSR Fatigue!

In a recent book just published some of our colleagues talk about ‘The end of CSR’. While we are not buying this line totally, it cannot be overlooked that CSR fatigue is spreading far and wide. Not only has CSR been totally ‘incorporated’ and has become a mainstream practice for most large businesses, it has also not prevented the scandals we had the opportunity of talking about. After all, most of the culprits in those incidents, including the major banks at the heart of the financial crisis, all have very much to tell us on their websites about the wonderful things they are doing in the CSR, sustainability or corporate citizenship area.

One trend then we can observe and which will continue to shape CSR practices is a move towards the core value creation of business. This may not be as comprehensive as Unilever’s ‘Sustainable Living Plan’ but it will certainly shape CSR instruments. The latest ‘G4’ revision of the reporting guidelines by the GRI, for instance, will move CSR related reporting away from being a separate ‘side show’ to becoming an integrated part of the financial reporting of companies. This trend will also be exacerbated from the regulatory side (see Trend 1 above): the SEC has recently adopted a rule to disclose the use ofconflict minerals for companies, which given the track record of this type of SEC rulings, will have significant impacts on the way companies implement responsible supply chain practices. While we don’t necessarily expect an avalanche of regulation here the trend is likely to become stronger in 2013.

Trend 4: The Action is Moving South!

In the 2013 ranking of Global 100 Most Sustainable Companies in the World, launched in Davos this week, the number two is the Brazilian Natura Cosmeticos. And they are just one of five Brazilian companies who made it into the top 100. For us this is indicative of a trend. The so-called ‘developing’ world is no longer  just an awkward backwater whose role in the CSR arena was at best to cause many companies in the Global North to clean up their supply chains. It is increasingly where the action is. Entire new areas of CSR, such as social innovation or social entrepreneurship have been initiated from the Global South. Think only of Mohammad Yunus and the Grameen Bank, which can be seen as a symbol of this movement. But we also see it at other levels. Indian and Chinese governments have long moved into initiatives to regulate and incentivize CSR for their companies. And we have also seen in 2012 that the story of Chinese multinationals moving into Africa as the new robber barons is likely not to go on forever: Chinese companies are facing exactly what Western companies were exposed to some years ago – with the Chinese government issuing the first Guidance for Social Responsibility for Chinese companies abroad in 2012.

Trend 5: Watch Social Media!

OK, somehow social media has come of age a little and we would be the last to pull that rabbit out of the hat in 2013 and sell it as the hottest new thing in town. In some quarters the cacophonic ubiquity of social media has led to its self defeat to the degree that some have even lamented in the past year its ineffectiveness in drawing attention to corporate scandals such as Apple in China.

The biggest change then is not the that social media is used in the CSR context, but that as a tool it has now passed the ‘hump’ on the adoption curve: it is no longer just for youngsters; rather 57% of those 50 to 64 years of age and even 38% of those over 65 are now engaged on at least one social network. From a CSR perspective this means that no longer a little blog or discussion forum to engage with the usual suspects of young activists, journalists or students is the future. Rather, the main channels of engagement and communication for business are changing. We talked about CSR fatigue above, and it is here where we will see the most significant changes in the way companies communicate. It is moving ‘from stats to stories’. Rather than putting out the annual alibi report document, social media amplifies the communication of real life impacts, of how people are affected, the need for discussion rather than one-way information, and the absolute imperative of time. CSR communication is not just putting out a report once a year, but it is about informing on a regular basis, close to events, with responses and updates in real time. The good news then is that social media will be less linked to activism or campaigns – but beware: the thirst for information facilitated by social media asks for more ongoing and regular engagement in CSR and will expose business to a much more direct and visible scrutiny by the general public.

Image by ND Strupler, reproduced under the Creative Commons License

Plagiarism, journalistic ethics ... and climate change?

One of the big ethics stories blowing up in Canada right now concerns plagiarism and journalistic ethics. Namely, criticisms of a journalist at one of the big national papers here, The Globe and Mail, have gone viral leaving the paper, and the journalist concerned, Margaret Wente, with a serious case to answer. Many, ourselves included, have been underwhelmed by the response of the paper to what is an extremely serious threat to their legitimacy. As regular readers will know, we are pretty serious about plagiarism, as are most academics.In fact, one of our colleagues here at York, Dawn Bazely, who heads up the Institute for Research and Innovation in Sustainability, was so riled by the case that yesterday she posted a blog piece on the scandal. With her agreement, we're re-posting it here, since we think it makes an interesting contribution to the debate from an academic perspective. 

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 SCENE: Kitchen, writing student references for medical schools, while CBC’s As It Happens plays on the radio.

JEFF DOUGLAS (As It Happens radio broadcoaster):

“”Media Culpa.” That’s the name of a blog maintained by Ottawa artist Carol Wainio. As the name suggests, the blog exposes what Ms. Wainio believes to be substandard journalism. Lately, her spotlight has been focusing on one Canadian journalist in particular: Globe and Mail columnist Margaret Wente.

On Friday, the Globe’s Public Editor, Sylvia Stead, responded to some of the issues raised by Ms Wainio. Ms. Stead included an explanation from Ms. Wente. But Carol Wainio isn’t satisfied, and neither is John Miller.

He’s the founding Chair of Ryerson University’s Journalism Department and professor emeritus. We reached Mr. Miller in Port Hope, Ontario.” (from The Monday Edition of As It Happens, duration 7 mins 49 secs)

DAWN BAZELY: “What the heck?” To my family hanging around doing homework and reading the Globe and Mail: ”Did you hear that?”

Yes, we heard it and after the interview with Prof. Miller (starting at minute 13:25 of the podcast), I read many of the blogs and the Globe and Mail articles about the plagiarism. The Globe and Mail admitted to some of what Carol Wainio has been documenting, though did not call it plagiarism. It culminated, this morning, in my sending a Letter to the Editor of the Globe and Mail explaining that until a transparent and public investigation takes place to restore my faith in their journalistic standards and practices, that I would be cancelling my online and print subscriptions. Too bad, because I am a huge fan of Lucy Waverman’s recipes, and my lobbying to get her back to the Saturday Life section from the mid-week section appeared to have borne fruit.

What does this debacle at the Globe and Mail have to do with Climate Change? A lot, actually (more on that in a moment).

It also has to do with how universities deal with ethics and academic integrity, including plagiarism. York University students are required to read the Academic Integrity webpages and do the tutorial about it. At York, I was one of the first professors to use Turnitin plagiarism software, because I brought in a lot of written work into BIOL 2050 (Ecology). Course instructors and teaching assistants spend a huge amount of their time educating about and policing academic honesty and making sure that plagiarism is not happening and if something is flagged as being potential plagiarism, filing complaints, holding meetings with associate deans and students involved, and then doing any follow up remedial work. There are large chunks of my life spent with tearful, upset students, that I will never ever get back.

So to read that a very public and polarizing columnist who has been given many board-feet of column space in what Chris Selley of the National Post describes in an online post as Canada’s “self-styled paper of record” is not only being questioned about possible plagiarism and that several instances of this have been raised in the past by Carol Wainio (you can read the comparisons of the text – they are all over the internet), but then to see the muted responses from the Globe’s Public Editor, and the Editor, made me feel utterly dismayed. THIS IS SERIOUS! In our courses, this would get students called into meetings, and if it continued (as appears to be have been happening), there would be a ramped up response and penalties imposed – severe penalties. Chris Selley quite rightly went on to observe that the Globe’s response “is completely out of keeping with the global journalism mainstream“.

I have written about the challenges of consistent blogging about sustainability, because of the time that I feel ethically obliged to spend checking sources, referencing and inserting links into posts, so as to maintain the standards that I am supposed to uphold as an academic. I get freaked out about accuracy and attribution. Apparently the Globe and Mail doesn’t see this as such a big issue.

And finally, climate change… It’s simply that Margaret Wente’s many columns on climate change, sustainability, energy, etc. indicate that she is happy to give a big shout out to skeptics and denialists and generally is not interested in considering the boring old scientific community in a respectful, (even semi-) balanced and informed dialogue. Furthermore, a number of her columns about about the environment have contained errors through omission – exactly one of the reasons for academic dishonesty charges being levelled against Bjorn Lomborg, himself a controversial climate skeptic – then believer – nowunfunded. I gave up reading Wente a long time ago after realizing that any time spent analyzing and responding was a total waste. The people now defending Wente in the comments section of the Globe and Mail appear to be supporting her because she speaks to their cultural beliefs and for them, uncomfortable facts are really not going to be that important (aka cognitive dissonance). A couple of years ago, the Globe and Mail actually did publish a response by Gerald Butts of WWF Canada to one of Wente’s anti-climate change screeds.

So, here I go – a bit of analysis and observation of a couple of Wente columns:

From a December 1st 2011 column, “Suppression of climate debate is a disaster for science”

“Instead of distancing themselves from the shenanigans, the broader climate-science community has treated the central figures in Climategate like persecuted heroes. That is a terrible mistake, because it erodes the credibility of the entire field. The suppression of legitimate debate is a catastrophe for climate science. It’s also a catastrophe for science, period.” (M. Wente)

Sorry – but the climate scientists at the University of East Anglia’s Climate Research Unit were cleared ofmalpractice allegations, as reported by the Guardian on April 14 2010 in an inquiry headed by Lord Oxburgh. More of the same hacked emails were put out there after the inquiry had finished, by the denialists – but Wente doesn’t mention the Oxburgh inquiry results anywhere, as far as I can tell – though she does consistently say that the science of climate change is not settled. NOT TRUE! Surely the Globe could have afforded to send her to any one of the International Polar Year conferences held in Quebec.

And  in the same column, Wente cites an economics professor on the topic of climate science: “Ross McKitrick… at the University of Guelph who is a leading climate-science critic” A quick check of McKitrick’s publications on Google Scholar, indicates that he publishes papers about the lack of evidence for climate change with a co-author Patrick J. Michaels of the libertarian think tank, the Cato Institute, Washington, D. C. Hmm – wonder who funds them? – oh, that billionaire, Koch.

Previously, Wente had covered Climategate in a column, ”Climate science’s PR disaster“ in which someone called Steve McIntyre a skeptic and “anarchist” was heavily referenced. He has recently published a journal paper confirming  climate change in Antarctica, but this is his only peer-reviewed paper – his other writing is on his blog page.

The problem with these two columns is that Wente is conflating peer-reviewed and non-peer reviewed writing. There is a whole field that considers academic and funder bias (but it’s not really ever mentioned by Wente).

I could go on picking Wente’s biased writing apart, but it’s pointless. She has sold many papers with this approach, and gets a lot of clicks on the internet. Except, that I cannot resist pointing out the irony of a June 14 column supporting fracking in which she’s actually calling for science: “I’m no expert on fracking technology, and I’m in no position to evaluate the risks. I have to rely on experts for that.” She fails to point out that there is research ongoing into this issue and a lot of concern about fracking. Yes, the research investigating the downsides of fracking is in its infancy, and there’s not much published on it, but Wente has never shied away from featuring the opinions of poorly-published people.

It really is time for the “legacy media“, as I have learned it is called, to step up to the plate and deal substantively with the allegations against Margaret Wente. This would at the very least, include running all of her writing through Turnitin or some other plagiarism software.

Dawn Bazely

Photo by smallestbones. Reproduced under Creative Commons licence

Cleaning up the "ethical oil" mess

With Stephen Harper's government getting plenty of heat at the Durban climate conference over its decision to relegate Kyoto to the history books,  there is a lot of discussion back home about the merits or otherwise of presenting the Canadian oil sands as "ethical oil". It's something we discussed in the blog earlier in the year, but the XL pipeline decision process has kept the issue very much on the front burner. Factor in a controversial TV spot by Ethicaloil.org comparing so-called "ethical" Canadian oil to "conflict" oil sourced from Saudi Arabia that funds oppression of women, and its no surprise to wind up in a heated debate

Yesterday, CBC, Canada's national broadcaster, featured a segment on ethical oil in its popular morning radio show The Current, and we were happy to be invited to participate, along with Kathryn Marshall, the spokesperson for Ethicaloil.org and Jody Williams, a Nobel Peace Prize winner, who has publicly come out against the tar sands.  You can hear the lively discussion, led by the impressive host Anna Maria Tremonti on the CBC website.

A colleague of ours in the law school here at York University, Stepan Wood, has blogged about the show and takes the time to expand upon some critical points that there was hardly even enough time to raise in the conversation itself. As he says:

"For one thing,[ethical oil's] narrow focus on human rights and the rule of law distracts attention from the massive environmental damage and energy consumption involved in extraction and processing of tar sands oil. For another, the claim that tar sands operations fully respect human rights is debatable, with numerous First Nations claiming that these operations impair their rights to clean water and a healthful environment. It is also hard to miss the xenophobic undertones of the Ethical Oil message–it is no coincidence that most of the countries targeted by the campaign are ethnically, culturally or religiously distinct from the white Canadian majority"

The bottom line, in which we and Stepan agree, is that Canada is very much not a leader when it comes to handling its responsibilities around oil extraction:

"To be a real leader Canada would have to show that it is genuinely committed to progress toward a post-carbon economy and improvement of the human rights records of Canadian companies overseas. This would include holding Canadian oil companies to the same high standards wherever they do business in the world. It is disingenuous to say that oil companies in Canada are ethical leaders if those very same companies are busily pumping oil and propping up those same repressive foreign regimes that the Ethical Oil campaign vilifies."

We don't expect that to happen any time soon, and in fact Canada has been content to be relegated very much to the margins of the Durban conference. When even China is criticizing you for setting a bad example, any claims that the country is a leader in providing "ethical oil" are only likely to fall on deaf ears.

Graphic by jfeathersmith. Reproduced under Creative Commons Licence

Going nuclear?

This weekend is another proof of the absurdities of short-lived international news cycles. While the revolution in Northern Africa/Libya is still ongoing but features rather low on news sites, and academic scandals are forgotten totally - the earthquake plus tsunami in Japan has swept most other stories from the screen.

Fair enough. What we have seen from Japan has been harrowing. Crane & Matten have taught and worked with many Japanese students over the years and our thoughts have been with them in recent days. We hope that they and their families are all fine and wish them our heartfelt best. Let us know how things are going!

One facet of the catastrophe though moves it clearly to a next level of watching some apocalyptic science fiction movie: We are talking about the ongoing news story about the explosion and potential meltdown of so far four nuclear reactors (by the time we write this). The nuclear beast is rearing its ugly head again.

We remember when the Chernobyl accident happened in 1986 many western commentators put much of the blame on the allegation that the Soviets had old technology, they did not run things properly and anyway, it just went to show that communists are not good at anything. Now – this is Japan, one of the high tech capitalist nations of the world. Sure, this was triggered by one of the top 5 earthquakes in history. But in Japan, earthquakes are not what extreme snowstorms are in Britain. The Kobe earthquake which claimed six and a half thousand lives happened just 16 years ago.

The event hits at a time when nuclear power was experiencing a second spring in many industrial countries. As a carbon-free source of energy it seems a good alternative to fossil fuels, which are considered key drivers of climate change. Many countries that have been shying away from nuclear after Chernobyl or the Harrisburg incident in the US are now reconsidering their options. Finland has just built some new reactors, Obama has issued fresh permits for uranium mining in Colorado, even Germany (which ruled it out 10 years ago) is prolonging the life-cycles of its existing plants – just to name a few examples.

While many experts in environmental politics considered the debate on nuclear power dead by the beginning of the last decade, it is amazing to see that it has come back. The disaster unfolding as we speak in Japan elucidates exactly why a rational discourse on nuclear power is so difficult.

The main threats of this technology are consequences which are mostly uncertain or even unknown. In other words, these ‘risks’ – apart from a few accidents we have seen – entail consequences which humans normally will find difficult to imagine, much less to calculate. The speculations on TV by ‘experts’ about what happens to Japan in case this really turns bad clearly demonstrates this. While the probability of nuclear incidents historically has been very low, the potential impact is without boundaries. Geographical boundaries, but also temporal ones: how long will people suffer from the fallouts we have already seen this weekend? Not to think about the worst case scenario...

Nuclear risks are unique. Their probability – from all we know – is rather low and since we have so few incidents, they are hardly calculable (unlike your car insurance, where we have ample data to establish probabilities). At the same time, the potential impact or damage of a nuclear accident tends toward infinity. Thus the normal way of assessing risks is rather difficult: a probability next to zero times a damage next to infinity – what exactly does this risk look like?

It is here where irrationality and ideology often fill a gap in the debate, as rational concepts fail to analyze the problem. This is exacerbated by the problem that nuclear risks are now ‘compared’ to the risks of global warming – which again is a risk that is difficult to calculate. Not much mathematical information exists on how likely the increase in temperature is. And even less information is available on how hard climate change will hit, where, when, who, and which parts of the world. So, finding trade-offs between nuclear risks and climate change risks is next to impossible – proving another characteristic of those modern risks: their ‘incommensurability’, meaning, it is impossible to ‘compare’ and weigh these risks against each other.

So what hope is there after this wake-up call about the fact that nuclear is not the silver bullet against climate change? We have to accept that climate change is real (even though we can say with little certainty how exactly it will hit us) and nuclear power is not a safe option either. We would argue that much more effort, resources and political will has to be directed toward alternative sources of energy: energy saving (by many accounts our largest resource), renewables, and lifestyle changes. If the disaster in Japan would trigger that debate there is at least a glimmer of hope coming out of this unfolding catastrophe.

Photo by IgnatiusJReillyEsq. Reproduced under Creative Commons Licence

Can the Canadian oil sands really be an 'ethical' source of energy?

The new year has got off to a bang in Canada with the new Environment Minister Peter Kent coming out of his corner fighting. According to Kent, the Albertan oil sands are not the environmental catastrophe we all thought they were. In fact, as he says, the oil sands are "an ethical source of energy". Yes, that's right. Alberta is the new home of ethical oil.  Oh boy, that's going to need some explaining.

Now, before you slam your head into the computer screen in disbelief, let's take a closer look at this claim and put it in a little bit of context. Kent's basic point is that because the oil sands are in Canada, they are properly and democratically regulated, they do not fall foul of corruption and abuses common in oil rich countries - and the proceeds don't go into funding terrorism. Compare that to the other states in the top 10 countries by proven oil reserves and you can see that he might have a point. Saudi Arabia, Iran, Iraq, Kuwait, Venezuela, UAE, Russia, Libya, and Nigeria - hardly a list of ethical hotspots it has to be said. As Kent puts it, "[Oil sands oil] is a regulated product in an energy superpower democracy... The profits from this oil are not used in undemocratic or unethical ways. The proceeds are used to better society in the great Canadian democracy."

OK, so let's not get into a debate about just how "great" the Canadian democracy is. After all this is a country that, under the current Government, has regularly taken to shutting down Parliament when things get a bit dicey. But against the rest of the countries with big oil reserves, it still comes up looking pretty good by comparison. This is important for potential buyers of oil sands oil, especially the US which is concerned with global energy security, and is looking to wean itself off its dependence on oil imports from countries that it would rather not have to go to war with again. In fact, Kent's ethical makeover of the oil sands is all part of the major charm offensive that the Canadian government is pursuing to bolster its reputation in the US and elsewhere where climate concerns have started making Canadian oil distinctly unpopular in recent years.

In this context Kent is right to promote some of the virtues of the oil sands. All energy sources have their positives and negatives - yet the oil sands has become chiefly known only for its social and environmental downside. So a bit of rebalancing of the ethical equation is not inappropriate. But claiming any source of non-renewable energy is "ethical" and especially one that is fraught with such problems as oil sands oil, is not too helpful in advancing the debate in a meaningful way. Such claims may get media attention but they also infuriate critics and simply serve to entrench existing antagonisms. Climate activists are likely to target the oil sands even harder now that the Canadian government is drawing out the battle lines in this way. Greenpeace Canada for example had already started campaigning on a 'Separate oil from state' platform including an anonymous leak site for inside tip-offs about government efforts to promote the oil sands. This is all part of a concerted NGO response to what  the Climate Action Network regards as, "federal officials ... systematically trying to kill clean energy and climate change policies in other countries in order to promote the interests of oil companies."

Far better it would have been then for Kent to acknowledge the shortcomings of the oil sands along with proclaiming their virtues. Any freshman ethics student knows that a utilitarian cost-benefit analysis of the ethics of different energy sources has to take into account more than just one factor. Country of origin is just one of a whole range of relevant issues. There is no way that the tar sands can be regarded as an ethical source of oil based on one factor alone. But country of origin "benefits" can be traded off with climate change "costs" if you subscribe to a utilitarian mode of thinking. However, a myopic, one-sided piece of government propaganda doesn't help anyone ... especially when it is proclaiming the virtues of "the great Canadian democracy".

Photo copyright Greenpeace. 

What’s wrong with Canada?

For a long time Canada – certainly in the rest of the world – had this image of a very progressive, liberal and forward looking country in terms of social and environmental responsibilities of business. This not only applies to business leaders which from an early time on championed these ideas. To mind comes Maurice Strong and his engagement for various UN led environmental initiatives in the 1970s. Or Chuck Hantho who, while CEO of what is now ICI Canada, initiated the ‘Responsible Care’ program in Canada which subsequently was adopted by the global association of the chemical industry and is now a standard for the industry in 53 countries globally. Not to forget David McTaggart, the Canadian businessman who became one of the founders and early leaders of Greenpeace. Also notable are wider initiatives such as the Montreal Protocol or, more generally, the courageous stance for human rights and integrity in the world, symbolized by ‘the last man standing in Ruanda’, Canadian General Romeo Dallaire on the UN mission when the Genocide began to unfold in the Central African country.

This all sounds like long ago now. The month of November was not a good month for Canadians with an interest in social responsibility of business. First, we saw Bill C-300 voted down by the Canadian parliament – a bill which attempted at raising the standards of environmental and social responsibilities of Canadian mining companies abroad. We might quibble about details of the bill. But it is pretty undisputable that the Canadian mining industry as a whole has a pretty dismal reputation around the world. What is conspicuous is that Canadian politicians do not even see some attempts at ‘symbolic politics’ – which the bill would have been by and large – as necessary. It makes you wonder.

Then, later in November, it was a – by all standards rather modest – attempt at addressing Canada’s more than wanting approach to climate change, which was voted down in the Senate (Canada’s second chamber of parliament). Bill C-311 was a modest attempt to close the gap between the Kyoto targets and the current performance of the country, ahead of a next round of negotiations in Cancun this month.

Of course it does not help to be governed by a party whose power base and current Prime Minster is from the province of Alberta which thrives on one of the most questionable mining operations in the world: the oil sands. But it cannot be all just old-style business interest driven political manoeuvring. This blog is triggered by reports about the work of Vancouver based consultant Patrick Moore for Asian Pulp and Paper (APP) basically legitimating the environmental record of a company that is allegedly responsible for the most rampant deforestation in Indonesia. The delicate detail – which seems to look symbolic for the country: Moore once was a director and spokesperson for Greenpeace.

All this is even more interesting as Canadians generally pride themselves on being so much more sophisticated, civilized and socially literate than their relatives ‘South of the border’. Looking, however, at the track record on the ground, the mood of the country has largely assimilated to that of their Southern neighbours. And were it not for the last bastion of Canadian’s pride in their social edge – the public health system - the Country’s practices make it look in many ways like the 51st state...

Photo by 416style reproduced under the Creative Commons Licence.

Climate change and the bottom line ... even in Canada?

Canada is no frontrunner in tackling climate change. In fact, in many respects, it is quite the reverse. So we were pleased to see the release of WWF Canada's report "Rethink Business How Addressing Climate Change Can Improve The Bottom Line" which looks at what some of the country's leading companies are doing to address climate change in their organizations.In fact we were so pleased that Andy agreed to write the forword for the report. Here's a sample of what he says:

"For Canadian business, the threat of climate change looms large. Nonetheless, despite its reputation as a clean, eco-loving country of verdant forestsand sparkling rivers, Canada remains a major laggard in climate protection. According to official statistics, it has one of the highest rates of per capita CO2 emissions of any country in the world. The conditions for a major change in this situation are hardly propitious either. The  economy is wedded to fossil fuels, and the federal government has been reluctant to tackle the problem of climate change through national regulation. It is clear that we need to look elsewhere for meaningful change.

Hotels, soft drinks, information technology, and paper – these might not be the obvious places to look for leadership in climate solutions in the country. However, this report demonstrates that these are indeed some of the industries where a quiet Canadian revolution is beginning to take shape. Each of the companies featured here – Fairmont Hotels & Resorts, The Coca-Cola Company, Hewlett-Packard Canada, and Catalyst Paper – have demonstrated a willingness to take a step beyond their industry rivals. They have all made an  impressive commitment to reduce absolute levels of greenhouse gas emissions. And they have each  demonstrated in their own way that doing so can also make good commercial sense. Their performance is far from perfect. But these companies can all point to significant progress that sets a benchmark for others to follow."

So the bottom line is that some of these leaders are doing some great stuff .... but there's still a long, long way to go, especially considering that these are in front of many of their competitors. If you want to read more about what these companies have done and the challenges they've faced, the whole report is downloadable for free, or you can also just download excerpts. One of the most interesting aspects for us though is that the report is based on a business collaboration implemented by WWF called Climate Savers that seeks to combine the efforts of the NGO and its corporate members to achieve meaninful carbon reductions. As Andy says in the foreword:

"The decision to take a lead on climate change is not taken lightly. WWF’s Climate Savers program, though, is a great example of what can be achieved when businesses and non-profit organizations decide to work together to achieve common goals. Such partnerships are tough to get right. Different priorities, a clash of  values, alternative ways of seeing the world: these can all derail the best-laid plans for collaboration. But  WWF Climate Savers program works because it offers a framework for action that is animated by a set of clearly articulated goals....The Climate Savers program is not just about targets, though. What Climate Savers does is provide support, advice, evaluation, and perhaps most importantly, a forum for the exchange of ideas and the communication of progress, that enables the program participants to better achieve
their goals."

We're not saying it's a panacea for tackling climate change, but challenges this big require collaborative action. And they demand a willingness to open up. And that's exactly what the Climate Savers initiative gets business in the habit of doing. It's a pity that the only way they seem able to do this is by appealing to business self-interest (as in "how addressing climate change can improve the bottom line"), but sure, there is a necessity for voluntary climate action to make some kind of commercial sense ... its just not the whole story. But if you're reading a blog about corporate responsibility, you probably didn't need us totell you that.

Business and climate change

Observant readers will notice that we've started adding some of our favourite blogs on business ethics-related subjects in the blogroll that you'll find on the right hand side of the screen. The latest addition is Climate Change Inc, the new blog on business and climate change by David Levy, a professor at the University of Massachusetts, Boston. Levy always has something pretty interesting to say, particularly on the politics of business responses to climate change. He's someone whose work we've found stimulating, and have always enjoyed bumping into him at conferences and collaborating on a few things along the way.

The new blog deals with all things business and climate change related, though with a particular slant towards politics and policy issues. We particularly liked this recent post on how the oil industry has recently resurrected its "carbon wars" strategy, including the mobilization of American citizens to protest against proposed climate change regulation. Here's what he says....

"....large numbers of Americans are suddenly getting excited about climate change. They are not, however, worried about rising CO2 levels and the impact on sea levels, hurricanes, or glaciers. They are jumping on buses and crowding into rallies to oppose the proposed energy legislation, which is intended to address climate change. Through placards, slogans, and speeches, the attendees demonstrate their concern that their very way of life – cheap fuel and electricity, even their jobs in energy-rich states – is under imminent attack. This threat is apparently more palpable and galvanizing than climate change, a distant and abstract concern, if not a hoax perpetrated by the same intellectual East Coast Europhiles trying to impose socialist medicine on beleaguered overtaxed Americans.

Perhaps a few of these angry citizens spontaneously joined the rallies in a state of high dudgeon after perusing the 1200 page Waxman Markey bill. Most likely, their transportation and placard messages were organized by Energy Citizens, whose website proclaims that it is “a nationwide alliance of organizations and individuals formed to bring together people across America to remind Congress that energy is the backbone of our nation’s economy and our way of life.” In fact, Energy Citizens was set up and financed primarily by the American Petroleum Institute (API), the US oil industry association, with support from the National Association of Manufacturers and other groups. It has contracted with a professional events management company to plan about 20 rallies against forthcoming energy and climate legislation in Southern US states, with a focus on energy producing states such as Texas. Member companies are encouraging their employees to join in. This project complements a massive increase in lobbying efforts by the fossil fuel industry in the last six months."

Fascinating stuff. And, as Levy notes, a real return to the oil industry's seemingly dead-in-the-water tactics of the 1990s when climate change denial was all the rage and various political strategies were deployed by the sector to derail the gathering climate change consensus. Levy goes on to offer an analysis of why the industry appears to have engaged in Carbon Wars round 2, but admits that a final conclusion is difficult to arrive at given the mixture of motives, interests and positions among some of the key players. However, as we mentioned not too long ago in relation to BP's "Back to Petroleum" strategy, a new conservatism appears to be blowing in the oil industry around sustainability issues (or at least the pretense of progressiveness has lost its allure), so there is much to be gained in the run up to Copenhagen by seeking to tweak the political climate towards a more accommodating pro-fossil fuel position.

Our best bet is that a range of different company strategies may start to emerge again which could derail any kind of univocal industry positioning, which seems to be the aim behind the latest manouevuring. But in the meantime, it looks like the main business action will be in the nonmarket (i.e. political) arena rather than in new market developments, at least until a new climate consensus is reached post-Copenhagen. Be sure to keep up with Levy's blog for all the latest developments.

Are we living in The Age of Stupid?

Here is another guest-blog from our friend and colleague Laura. Exciting news about new releases from the world of Celluloid. Timely to accompany the Cannes Festival right now. Enjoy!
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I, like Crane & Matten, like to use film and literature to explore our subject in alternative ways which sometimes capture the imagination more profoundly than the average media report or academic case study. Business Ethics films seem to me to fall into two simple categories, the documentary-type film on the one hand and on the other the dramatisation of either a real or realistic example of ethically dubious business-related behaviour. In the documentary form I would include Al Gore’s Inconvenient Truth, Leonardo di Caprio’s The 11th Hour, Supersize Me, The Corporation, WalMart: The High Cost of Low Price, Orgasm Inc. and the ENRON documentary, The Smartest Guys in the Room. The contrasting dramatised approach includes Erin Brockovich, Blood Diamond, The Insider, Rogue Trader, There will be Blood, Michael Clayton and Fast Food Nation.

Each of these two approaches has their advantages and limitations of course. The documentary perspective can comfortably contain more factual information but can err on the preachy side – maybe that’s why the celebrity association seems to pep things up a little and hold interest. And even if you are basically in agreement with the premise, you can’t escape the certain knowledge that the version of events you are getting is clearly aiming to get one side of the story firmly across. This doesn’t move the arguments tremendously far forward but can focus the mind and provide ammunition for debate. The dramatisation approach to Business Ethics films are easier-going to watch in a sense, though of course the credibility of the message can get subsumed in the dramatic action.

A hybrid approach, with the detail and credibility of a documentary but the entertainment factor of a dramatisation, has potential to profit from the best of both worlds. In March a new film released in the UK managed to do just that and combine the documentary and the dramatic styles with considerable success to bring home the runaway catastrophe of climate change with a punch, and miraculously without making you feel like you have been lectured at.

The Age of Stupid is directed by Franny Armstrong and truly is a film which reaches parts you had forgotten you had. It stars Pete Postlethwaite (seems every film needs a celebrity, but then he is a brilliant actor) as an archivist living alone in 2055 in a world decimated by climate change. As he mutters to himself and his computer screen he reviews footage from 2008 and ponders why, when we had the chance, we didn’t do anything about the environmental damage we were causing.

The documentary aspect comes through as the archivist follows several real stories from around the world: an octogenarian French mountain guide who has watched his beloved landscape change; an ambitious entrepreneur starting a low-cost airline in India and seeking the advantages there which the developed world has long enjoyed; a Shell oilman from New Orleans who sees no real contradiction between a life spent in the oil industry and the horrendous damage caused by Hurricane Katrina, in which he helped to save over 100 people’s lives; a young Nigerian woman who is doing all she can to earn money to put herself through medical school and become a doctor (including fishing in the oil-polluted waters and washing fish with ‘Omo’ to make them ‘edible’); two Iraqi refugee children looking for their brother; and an English wind farm developer trying to overcome opposition in the form of formidable middle aged, middle class locals (he loses).

These real lives show intriguing, sometimes heart breaking perspectives on the fallout of climate change, almost all of which have some connection to corporations (Shell in particular come under the spotlight) and their activities, so useful business ethics material as well as a straight education on the complexity we cause by messing with the environment. For me what it did spectacularly well was bring home the point that climate change is not something for the younger (or future) generation to worry about – it is us, now, of all ages who need to get a grip. In fact, probably, the older we are, the more culpable, with our high cost, high energy consuming lifestyles and endless rooms of stuff we could easily live without. It is the oil man who points out that people looking back on our era will be bound to call it the Age of Stupid, for our failure to act on the damage we are causing.

The film is timed explicitly to galvanise action prior to the United Nations Climate Change Conference in December 2009 in Copenhagen. This is the follow-up to the Kyoto Protocol and the Bali Roadmap. Director Franny Armstrong puts it quite plainly herself “Copenhagen is our last chance”. Certainly, it will be an incredibly important political, social, environmental and economic event, and one in which we will see quite clearly the metal of our respective politicians. Legislation is at last being looked to as part of the solution, as we have seen in the Climate Change Act 2008 in the UK and may yet witness from the Climate Change Bill currently being debated in the House of Representatives in the US. This Bill, going under the official title of the American Clean Energy and Security Act of 2009 , should be considered by the Energy and Commerce Committee by the end of May 2009. The time for tackling climate change could hardly be any more ‘now’.

I –seriously – spent the next few evenings after seeing The Age of Stupid sitting in an unheated, darkened house desperately trying to save energy. The film is that moving and effective at waking you up to the situation we are in. Happily spring is here in the UK so I no longer need to take quite such chilling steps to do my bit. But at the risk of sounding evangelical (as if I haven’t already!), I would say – go and see the film, or better still arrange for it to be shown at your workplace/university/school/arts centre or wherever. If we are quick, we may just manage to be not as stupid as we look.

Laura J. Spence, Director, Centre for Research into Sustainability, Royal Holloway, University of London, UK. www.rhul.ac.uk/management/cris

Barack Obama to be a boost to CSR?

As many people have remarked, last week's election of Barack Obama to the US Presidency was a historic event. One of the questions we have been musing on though is what exactly an Obama Presidency might mean for business ethics and CSR in the future. The George Bush years are certainly finishing with a nasty bang in terms of the financial crisis and the legacy of ethical mismanagement, as we have discussed in previous blogs. That said, for better or for worse, the free market agenda endorsed by Bush has clearly provided plenty of scope for voluntary CSR initiatives ... and for a fair dose of corporate irresponsibility. So it is perhaps no coincidence that the last eight years have seen the issue of responsible business come to the fore like never before. Without regulatory oversight, business self-regulation has been the main game in town for those seeking responsible practice.

So what of the future then under Obama? Much has been made of the President-elect's commitment to climate change mitigation strategies (specifically cap-and-trade legislation). Andy Savitz, writing in Ethical Corporation recently, suggested that would be the area where he would be likely to make immediate impact:

"Climate change, one of his recurrent campaign messages, is the easiest and most dramatic way for president Obama to deliver on his promise of bi-partisanship at home and to show the rest of the world that we are back in the international relations business. The financial mess may slow it down, but we can expect to see a complete turnabout in Washington, with national cap and trade legislation and the emergence of the US as a leader in the global climate change negotiations."

But there are also many other areas where, we might see the change that Obama promises having an impact on CSR - from health care reform (where private sector responsibilities might be fundamentally reshaped), to labour conditions (where minimum requirements may be put on foreign imports), to clean technology and "green jobs" (where companies may face new incentives and disincentives to accelerate sustainability and oil independence).

So perhaps it was no surprise then that a survey conducted at last week's Business for Social Responsibility (BSR) conference reported that almost nine in ten of the survey's 400 or so respondents welcomed Obama's election as promising a positive impact on advancing CSR. But the scale of optimism was quite remarkable given the circumstances of the financial crisis. Plus, this anticipation of an Obama boost to CSR is matched by an increased expectation of business regulation. The same survey reported that an overwhelming majority (94 percent) anticipated increased government regulation of issues related to corporate responsibility, including climate change (86 percent) and corporate governance and financial transparency (83 percent).

So what's going on here? On the one hand, we see expectation of more CSR, which is typically associated with voluntary activity beyond that required by law. On the other, we're also seeing greater expectation of regulation itself - which according to many would be seen as an alternative to voluntarist CSR. Its an interesting confluence, which at some level is perhaps a reflection of an underlying conviction that the US could move towards an approach to CSR where different constellations of regulation, self-regulation, and voluntarism are developed at the industry level through multipartite initiatives. Certainly, one of the main areas that we see enthusiasm for Obama from the CSR movement is his commitment to a unifying agenda, which many see as promising a new era of collaboration between business, government, and civil society.

The first test of this will probably be in the automotive industry, where the failing "big 3" car companies are seeking financial assistance, and where Obama could potentially see millions of people lose their jobs in the first year of his presidency. At present the rhetoric is still about protecting ordinary workers and ensuring that the car industry remains both economically and environmentally sustainable within a broader agenda of reducing America's oil dependency (which for Obama appears to be more about developing renewable energy sources than military manoeuvring in the Middle East). But there are going to be tough choices to be made here, and it is uncertain yet whether the new administration will have the skill (or the time) to develop a sophisticated package that manages to simultaneously save the industry, protect jobs in the long term, AND turn the American car giants around into sustainable innovators. Whatever the outcome, it appears that we will be getting deep insight into Obama's real impacts on CSR sooner rather than later. Its going to be an interesting few months...