Sustainability and the Company of the Future
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Greenwash: Corporate Environmental Disclosure Under Threat of Audit∗
Greenwash: Corporate Environmental Disclosure under Threat of Audit∗ Thomas P. Lyon†and John W. Maxwell‡ May 23, 2007 Abstract We present an economic model of greenwash, in which a firm strategi- cally discloses environmental information and a non-governmental organi- zation (NGO) may audit and penalize the firm for failing to fully disclose its environmental impacts. We show that disclosures increase when the likelihood of good environmental performance is lower. Firms with in- termediate levels of environmental performance are more likely to engage in greenwash. Under certain conditions, NGO punishment of greenwash induces the firm to become less rather than more forthcoming about its environmental performance. We also show that complementarities with NGO auditing may justify public policies encouraging firms to adopt en- vironmental management systems. 1Introduction The most notable environmental trend in recent years has been the shift away from traditional regulation and towards voluntary programs by government and industry. Thousands of firms participate in the Environmental Protec- tion Agency’s partnership programs, and many others participate in industry- led environmental programs such as those of the World Business Council for Sustainable Development, the Chicago Climate Exchange, and the American Chemistry Council’s “Responsible Care” program.1 However, there is growing scholarly concern that these programs fail to deliver meaningful environmental ∗We would like to thank Mike Baye, Rick Harbaugh, Charlie Kolstad, John Morgan, Michael Rauh, and participants in seminars at the American Economic Association meetings, Canadian Resource and Environmental Economics meetings, Dartmouth, Indiana University, Northwestern, UC Berkeley, UC Santa Barbara and University of Florida for their helpful comments. -
Campaigners' Guide to Financial Markets
The Campaigners’ Guide to Financial Markets THETHE CAMPCAMPAIGNERS’AIGNERS’ GUIDEGUIDE TTOO FINFINANCIALANCIAL MARKETSMARKETS Effff ective Lobbying of Companies and Financial Institutions Nicholas Hildyard Mark Mansley 1 The Campaigners’ Guide to Financial Markets 2 The Campaigners’ Guide to Financial Markets Contents Preface – 7 Acknowledgements – 9 1. FINANCIAL MARKETS - A NEW POLITICAL SPACE – 11 A world transformed – 12 The impacts of globalisation – 14 The growing power of the private sector – 16 The shifting space for change – 17 Lobbying the markets – 18 The power of the market – Markets as “neutral ground” – NGO strengths: market weaknesses – Increasing consumer awareness – Globalisation and increased corporate vulnerability – The rise of ethical shareholding – Changing institutional cultures – New regulatory measures – A willingness to change? The limits of market activism – 33 Is a financial campaign appropriate? – 33 Boxes The increasing economic power of the private sector – 13 What are financial markets? – 14 Changing the framework: From Seattle to Prague – 18 Project finance – 20 Consumer and shareholder activism – 23 A bank besieged: Consumer power against bigotry – 25 Huntingdon Life Sciences: Naming and shaming – 27 First do no harm – 30 The impact of shareholder activism – the US experience (by Michelle Chan-Fishel) – 33 Put your own house in order – 34 Internal review – 33 2. UNDERSTANDING THE MARKETS – PSYCHOLOGY,,, ARGUMENTS AND OPENINGS – 37 Using the mentality of the market to your advantage – 38 Exposing the risks – 39 Key pressure points and how to use them – 41 Management quality – Business strategy – Financial risk: company analysis / project analysis – Non–financial risks – Political risks – Legal risks – Environmental risks – Reputational risks Matching the pressure points to the financial player – 54 Boxes Reading the balance sheet – 40 ABB – Moving out of dams – 43 Three Gorges: Bond issues challenged – 47 3. -
Environmental Protection in the Information Age
ARTICLES ENVIRONMENTAL PROTECTION IN THE INFORMATION AGE DANIEL C. ESTy* Information gaps and uncertaintieslie at the heart of many persistentpollution and natural resource management problems. This article develops a taxonomy of these gaps and argues that the emerging technologies of the Information Age will create new gap-filling options and thus expand the range of environmental protection strategies. Remote sensing technologies, modern telecommunications systems, the Internet, and computers all promise to make it much easier to identify harms, track pollution flows and resource consumption, and measure the resulting impacts. These developments will make possible a new structure of institutionalresponses to environmental problems including a more robust market in environmental prop- erty rights, expanded use of economic incentives and market-based regulatorystrat- egies, improved command-and-control regulation, and redefined social norms of environmental stewardship. Likewise, the degree to which policies are designed to promote information generation will determine whether and how quickly new insti- tutional approaches emerge. While some potential downsides to Information Age environmental protection remain, the promise of a more refined, individually tai- lored, and precise approach to pollution control and natural resourcemanagement looks to be significant. INTRODUCTION ................................................. 117 I. DEFINING THE ROLE OF INFORMATION IN THE ENVIRONMENTAL REALM ............................... 121 A. Information -
Csr Statements: Incentives and Enforcement in the Wake of the Business Roundtable’S Statement on Corporate Purpose
CSR STATEMENTS: INCENTIVES AND ENFORCEMENT IN THE WAKE OF THE BUSINESS ROUNDTABLE’S STATEMENT ON CORPORATE PURPOSE Arielle Sigel* ABSTRACT Corporate social responsibility (“CSR”) statements—voluntary statements made by a corporation to improve its practices in three broad areas: environmental, social, and governance (“ESG”)—are increasingly expected from companies. Both consumers and investors are interested in whether companies are making efforts at social responsibility. In 2019, the Business Roundtable’s statement focused on CSR, emphasizing corporations’ commitment to stakeholders as well as shareholders. This statement signaled a broader shift away from for-profit companies’ profitability focus, and other prominent industry figures, such as BlackRock’s Larry Fink, continue to voice similar sentiments. The business judgment rule and related corporate law doctrines and cases, such as Dodge v. Ford, provide directors with a great deal of deference—within limits, of course—to make decisions that do not fulfill their primary duty of profit maximization. While CSR statements help companies by providing brand recognition, meeting consumer demand, and creating social good, these companies’ decisions to pursue CSR goals do not always align directly with maximizing profits. This creates a rift between directors’ and companies’ legal obligations and the trend of CSR and stakeholder theory. This Note seeks to close this rift by exploring the incentives behind CSR statements and explaining how directors can fulfill their duties by linking CSR statements to profits. In doing so, it concludes that CSR is a proper corporate purpose. CSR statements, with certain conditions placed on them, benefit both companies and society. If companies get to reap the reputational and financial benefits from making CSR statements, then companies must make good faith efforts to achieve their stated goals. -
Greenwash + 10 the UN's Global Compact, Corporate Accountability
GreenwashGreenwash ++ 1010 The UN’s Global Compact, Corporate Accountability and the Johannesburg Earth Summit January 2002 Greenwash + 10 The UN’s Global Compact, Corporate Accountability and the Johannesburg Earth Summit Table of Contents Executive Summary and Recommendations........................................1 The Road from Rio..............................................................................2 Global Compact: Theory and Reality ..................................................2 Greenwash and Bluewash Definitions ................................................3 The Global Compact’s Contradictions ................................................4 Bluewash ............................................................................................6 Abstracts of Six Studies of Global Compact Violations........................7 The Business Action for Sustainable Development..............................9 Deep Greenwash ................................................................................9 Shell’s Greenwash—Responsibility without Accountability ..............10 Classic Greenwash ............................................................................10 Shell’s Greenwash Award ..................................................................11 Toward Corporate Accountability—A Framework Convention ........12 The More Things Change..................................................................13 Text of Letter to Secretary General Kofi Annan ................................14 Notes ..........................................................................................15-16 -
The True Cost of Chevron an Alternative Annual Report May 2011 the True Cost of Chevron: an Alternative Annual Report May 2011
The True Cost of Chevron An Alternative Annual Report May 2011 The True Cost of Chevron: An Alternative Annual Report May 2011 Introduction . 1 III . Around the World . 23 I . Chevron Corporate, Political and Economic Overview . 2. Angola . 23. Elias Mateus Isaac & Albertina Delgado, Open Society Map of Global Operations and Corporate Basics . .2 Initiative for Southern Africa, Angola The State of Chevron . .3 Australia . 25 Dr . Jill StJohn, The Wilderness Society of Western Australia; Antonia Juhasz, Global Exchange Teri Shore, Turtle Island Restoration Project Chevron Banks on a Profitable Political Agenda . .4 Burma (Myanmar) . .27 Tyson Slocum, Public Citizen Naing Htoo, Paul Donowitz, Matthew Smith & Marra Silencing Local Communities, Disenfranchising Shareholders . .5 Guttenplan, EarthRights International Paul Donowitz, EarthRights International Canada . 29 Resisting Transparency: An Industry Leader . 6. Chevron in Alberta . 29 Isabel Munilla, Publish What You Pay United States; Eriel Tchwkwie Deranger & Brant Olson, Rainforest Paul Donowitz, EarthRights International Action Network Chevron’s Ever-Declining Alternative Energy Commitment . .7 Chevron in the Beaufort Sea . 31 Antonia Juhasz, Global Exchange Andrea Harden-Donahue, Council of Canadians China . .32 II . The United States . 8 Wen Bo, Pacific Environment Colombia . 34 Chevron’s U .S . Coal Operations . 8. Debora Barros Fince, Organizacion Wayuu Munsurat, Antonia Juhasz, Global Exchange with support from Alex Sierra, Global Exchange volunteer Alaska . .9 Ecuador . 36 Bob Shavelson & Tom Evans, Cook Inletkeeper Han Shan, Amazon Watch, with support from California . 11. Ginger Cassady, Rainforest Action Network Antonia Juhasz, Global Exchange Indonesia . 39 Richmond Refinery . 13 Pius Ginting, WALHI-Friends of the Earth Indonesia Nile Malloy & Jessica Tovar, Communities for a Better Iraq . -
Chapter 5 Socially Responsible
CHAPTER 5 SOCIALLY RESPONSIBLE BUSINESS ² DOING THE RIGHT THING Businesses have an ethical responsibility to customers who buy goods and services from them. Socially responsible business means that companies do the right thing for their customers. Companies consider profit, consumer satisfaction, and societal well being as equally important in the way business is conducted. Governments often enact laws that force businesses to function ethically. Consumers also can force businesses to act ethically regardinG their purchases. For example, in the United States today, consumers and consumer activists boycott over 800 products. This chapter is on socially responsible business. Teachers and students want to know about ways in which businesses are held accountable to customers for goods and services that they sell. AccordinG to consumer rights laws, people who buy goods and services have four rights: the right to be safe, the right to be informed, the right to choose, and the right to be heard. This chapter will provide teachers and students with opportunities to learn more about socially responsible business and about doing the right thing. In the United States, businesses are often judGed by their socially responsible behaviors. Most people agree that these include the following specific elements: equal employment opportunity for all FLWL]HQVUHJDUGOHVVRIWKHLUUDFHUHOLJLRQRUVH[UHVSHFWIRUHPSOR\HHV·GLYHUVLW\VDIHW\DQGKHDOWKLQ the workplace; and assurance and full disclosure on the quality of products and services. If any one of these elements is ignored or abused, a business is likely to be subjected to a penalty and sometimes, legal action. ZY BACKGROUND INFORMATION In the 1960s, Ralph Nader, an American economist and consumer advocate, spoke and wrote about WKHVRFLDOUHVSRQVLELOLW\IRUEXVLQHVVHV7RGD\EXVLQHVVHVXVHKLVLGHDVWRPDNHVXUHWKDWFXVWRPHUV· rights are protected. -
TGCSR Briefing Paper
Briefing Paper No. 3 APRIL 2002 Towards Global Corporate Social Responsibility Malcolm Keay As the 'battle at Seattle' reminded us, attitudes towards trade liberalization and globalization are polarized. Are they forces for good or evil? Do they benefit economies by generating growth and employment, promoting development and transferring skills? Or do they destroy the environment and undermine local communities without supplying a sustainable alternative? At international governmental level such questions are being grappled with in the new trade round emerging from the World Trade Organization (WTO) discussions in Doha. Can trade liberalization be made compatible with sustainable development? If not, the whole process of globalization may increasingly be called into question. The issue engages everyone with an interest in international development, including companies and civil society as a whole as well as governments. Increasingly, companies are recognizing that they have a wider responsibility to the communities within which they operate – Corporate Social Responsibility (CSR). Whether the impacts of globalization are positive or negative will depend in part on the way in which companies respond to this challenge. This paper discusses current developments in this area and considers where they are taking us. It draws on discussion at the RIIA conference on 'Corporate Social Responsibility - From Words to Action' held at Chatham House in October 2001. BRIEFING PAPER 2 Towards Global Corporate Social Responsibility this is often completely distinct from the company's main business Corporate Social Responsibility: activities. concepts, development and issues Much more difficult is what might be called 'filling the Corporate Social Responsibility is not a new concept. -
Houston, We Have a Problem
HOUSTON, WE HAVE A PROBLEM AN ALTERNATIVE ANNUAL REPORT ON HALLIBURTON, APRIL 2004 TABLE OF CONTENTS I. Introduction: Houston, We Have a Problem II. Military Contracts, the War on Terrorism, and Iraq III. Around the World IV. Corporate Welfare and Political Connections V. Conclusion and Recommendations V. Additional Resources COVER: Zubair oil fields, Southern Iraq. Photo: David Martinez, Corpwatch HOUSTON, WE HAVE A PROBLEM HOUSTON, WE HAVE A PROBLEM Halliburton, the largest oil-and-gas services company in the world, is also one of the most controversial corporations in the United States. The company has been the number one financial beneficiary of the war against Iraq, raking in some $18 billion in contracts to rebuild the country’s oil industry and service the U.S. troops. It has also been accused of more fraud, waste, and cor- ruption than any other Iraq contractor, with allegations ranging from overcharging $61 million for fuel and $24.7 million for meals, to confirmed kickbacks worth $6.3 million. Halliburton is also currently under investigation by the Department of Justice. Perhaps most importantly, Halliburton has friends in the high- Although Halliburton saw a barrage of criticism in 2003, the est of places: Vice President Dick Cheney was Halliburton’s company has a history of scandal. Since 1919, when Earle P. CEO prior to his taking office in 2000, and he continues to Halliburton founded the company with patented technology receive annual payments from the company in excess of stolen from his former employer2, Halliburton has been $150,000. While CEO at Halliburton from 1995 to 2000, involved in controversial oil drilling projects around the world. -
The OECD Guidelines and Other Corporate Responsibility Instruments: a Comparison”, OECD Working Papers on International Investment, 2001/05, OECD Publishing
Please cite this paper as: Gordon, K. (2001), “The OECD Guidelines and Other Corporate Responsibility Instruments: A Comparison”, OECD Working Papers on International Investment, 2001/05, OECD Publishing. http://dx.doi.org/10.1787/302255465771 OECD Working Papers on International Investment 2001/05 The OECD Guidelines and Other Corporate Responsibility Instruments A COMPARISON Kathryn Gordon DIRECTORATE FOR FINANCIAL, FISCAL AND ENTERPRISE AFFAIRS WORKING PAPERS ON INTERNATIONAL INVESTMENT Number 2001/5 The OECD Guidelines and Other Corporate Responsibility Instruments: A Comparison By Kathryn Gordon December 2001 Kathryn Gordon is a Senior Economist at the Capital Movements, International Investment and Services Division of the OECD. Business for Social Responsibility’s contribution to this paper is gratefully acknowledged. This paper forms part of an OECD publication entitled OECD Guidelines for Multinational Enterprises: Annual Report 2001 which was published in December 2001. Organisation for Economic Co-operation and Development 2001 THE OECD GUIDELINES AND OTHER CORPORATE RESPONSIBILITY INSTRUMENTS: A COMPARISON Introduction The OECD Guidelines are recommendations by governments to multinational enterprises (MNEs) operating in or from the 33 countries that adhere to the Guidelines. The Guidelines help ensure that MNEs act in harmony with the policies of countries in which they operate and with societal expectations. They are the only comprehensive, multilaterally endorsed code of conduct for MNEs. They establish non-binding principles and standards covering a broad range of issues in business ethics. The basic premise of the Guidelines is that internationally agreed principles can help to prevent misunderstandings and build an atmosphere of confidence and predictability among business, labour, governments and society as a whole. -
Tangled up in Blue: Corporate Partnerships at the United Nations
Corporate Partnerships at the United Nations Published by TRAC–Transnational Resource & Action Center www.corpwatch.org September 2000 Tangled Up In Blue: Corporate Partnerships at the United Nations Table of Contents: Executive Summary........................................................1 Introduction......................................................................2 Four Fatal Flaws of the Global Compact........................3 Global Compact Corporate Partners................................4 Other Partnerships............................................................6 The UN’s Guidelines......................................................7 UN-Corporate Partnerships chart....................................8 A Brief History................................................................9 Ideology and Politics of Corporate Partnerships..........10 Toward a Corporate-Free United Nations......................11 Appendix A: The Global Compact................................12 Appendix B: Citizens Compact....................................13 Partial list of groups endorsing the Citizens Compact..14 Endnotes........................................................................15 Published by TRAC–The Transnational Resource & Action Center September 2000. Executive Summary • Secretary General Kofi Annan has encouraged all UN agencies to form partnerships with the pri- vate sector. The centerpiece of this initiative is his Global Compact, launched with the agencies for environment (UNEP), labor (ILO) and human rights (UNHCHR) -
World Bank Document
SP DISCUSSION PAPER NO.0011 23071 Public Disclosure Authorized Ratcheting Labor Standards: Regulation for Continuous Improvement in the Global Workplace Public Disclosure Authorized Charles Sabel, Dara O'Rourke and Archon Fung May2000 Public Disclosure Authorized Public Disclosure Authorized o FrottSion JABOR MARKETS, PENSIONS, SOCIAL ASSISTANCE T H E W O R L D B A N K RATCHETING LABOR STANDARDS: Regulation for Continuous Improvement in the Global Workplace Charles Sabel Columbia Law School Dara O'Rourke Massachusetts Institute of Technology Department of Urban Studies and Planning Archon Fung JFK School of Government Harvard University May, 2000 , .... I ,...- ......-s3 -0 -N Suiv- s moamaommva l:3cN3Jav .... - - - -- ------.;- -rU;-- - )qtsuodslaaR3jp saj'o' -IN l£ -- ' - ~~~S(RIY(NV1S M0O¶1VNI131{JV21 (IVA1 TA LZ '.I''''''VXOAIS M1 N1 SNOUVUNfO i S'D 9Ta(Ilas 'A ....-a3ZmSimn s7OJlq pUt SUOflLl!U Z7 81-.T ... .. HNSO..3S 04 3lH1 Nl SM 30S fO)IJ9NI'llhllES-M 'A ST.Nouvmau *of'v'' a'--- -NafO1 0 o NODIS3U-11 1m z...............................................N; a tV(,Cox;nSayv -iofsuolwpuno_?J 6 .................................................. io10a5 ,vwJofuI atp put' uofwzqlvqolo) -- --- - - - '- - - - - -------- ------ - ------------------------ - -- - ''''''''''0 7 Nu .av.iouot saonNuNoi uoAvauoioa.xawaAj' NoLqlsYum S a0LaL NOLLJf1UAO RATCHETINGLABOR STANDARDS: REGULATIONFOR CONTINUOUS IPROVEMENT IN THE GLOBAL WORKPLACE ABSTRACT RatchetingLabor Standards (RLS) is a regulatory altemative that aims to improve the social performance of firms in the global economy. Under RLS, firms disclose to a certified monitor informationon their social performance, minimally including working conditions,hours, and wages. The monitors rank firms on the basis of their current social performanceand their rates of improvementand make these rankings, and the methods on which they are based, accessible to the public.