Big Business, Little Splash

Big Business, Little Splash:

Tackling the World Water Crisis

Blog by Wayne Visser

Part 11 of 13 in the Age of Responsibility Blog Series for 3BL Media.

About 2.4 billion people live in water-stressed countries, according to a report by the Pacific Institute. Water demand in the next two decades will double in India to 1.5 trillion cubic meters and rise 32% in China to 818 billion cubic meters, according to the 2030 Water Resources Group. China is home to roughly 20% of the world’s population, but has only about 7% of the world’s water. That means there are around 300 million people living in water-scarce areas. According to a World Bank report, water scarcity and pollution reduce China’s gross domestic product by about 2.3%.

When I interviewed Fred Pearce about his book, When the River Runs Dry, he told me that, for the average Westerner to get through the day, it takes about a hundred times their own weight in water – that’s every day; not every year, every day. The water used is mainly to grow the things that we eat. Pearce gave me some of the facts and figures: To grow a kilogram of wheat takes about a ton of water, a kilogram of rice takes more. Once you start feeding grains to livestock to produce meat and dairy products, the numbers are even higher. To produce enough meat for one hamburger takes about 10,000 litres of water, which is about 10 tons. If you are a vegetarian you are not doing too much better because it typically takes 4,000 litres of water to produce one litre of milk.

That’s for food. What about drinks? Coca-Cola sells 1.5 billion beverages a day in over 200 countries and uses about 2.5 litres of water to produce one litre of its products. The company received its water wake up call in 2002, when residents of Plachimada, a village in India’s southern state of Kerala, accused the company’s bottling plant there of depleting and polluting groundwater. Two years later, the local government forced Coke to shut down the plant. In 2006, their situation got worse when a New Delhi research group found high levels of pesticides in Coca-Cola and PepsiCo’s locally produced soft drinks, resulting in several Indian states banning their products. Coke denied any wrongdoing, claiming that bore-hole water fed farming was mainly responsible for lowering the water table and that the pollution claims were unsubstantiated. However, the public perceptions battle had already been lost.

Speaking to Time magazine in 2008, Jeff Seabright, the company’s vice president of environment and water resources, admitted that Coke had mishandled the controversy. ‘If people are perceiving that we’re using water at their expense, that’s not a sustainable operation,’  he said. This realisation resulted in a serious shift in Coke’s strategic positioning of its CSR towards tackling water as priority number one. ‘It’s great that companies used to hand out checks for scholarships or to clean up litter,’ said Seabright, ‘but increasingly the real relevance is using the company’s core competence to address issues that are of societal concern.’ And for Coke and the communities in which it operates, the concern is water …

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[button size=”small” color=”blue” style=”tick” new_window=”false” link=”http://www.csrinternational.org”]Link[/button] CSR International (website)

[button size=”small” color=”blue” style=”tick” new_window=”false” link=”http://www.waynevisser.com/books/the-age-of-responsibility”]Link[/button] The Age of Responsibility (book)

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Visser, W. (2012) Big Business, Little Splash: Tackling the World Water Crisis, Wayne Visser Blog Briefing, 17 April 2012.

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What Drives the Business Case for CSR?

What Drives the Business Case for CSR?

Blog by Wayne Visser

Part 10 of 13 in the Age of Responsibility Blog Series for 3BL Media.

One of the ways the business case is determined is that each region, country or community has a different combination of CSR drivers. I will start with the five typical CSR drivers that are local (or internal) drivers, namely pressures from within the country or community.

1. Cultural tradition

In many countries and regions, CSR draws strongly on deep-rooted indigenous cultural traditions of philanthropy, business ethics and community embeddedness. For example, in a survey of over 1,300 small and medium-sized enterprises in Latin America, Antonio Vives found that the region’s religious beliefs are one of the major motivations for CSR. In Asia, a study by scholars Wendy Chapple and Jeremy Moon reached a similar conclusion, namely that ‘CSR does vary considerably among Asian countries but that this variation is not explained by [levels of] development but by factors in the respective national business systems’. And in Africa, I have found that the values-based traditional philosophy of African humanism (ubuntu) is what underpins much of the modern, inclusive approaches to CSR on the continent.

2. Political reform

CSR cannot be divorced from socio-political reform processes, which often drive business behaviour towards integrating social and ethical issues. For example, the political and associated social and economic changes in Latin America since the 1980s, including democratization, liberalization, and privatization, have shifted the role of business towards taking greater responsibility for social and environmental issues. Likewise, more recently, the goal of accession to EU membership has acted as an incentive for many Central and Eastern European countries to focus on CSR, since the latter is acknowledged to represent good practice in the EU.

3. Socio-economic priorities

CSR is typically shaped by local socio-economic priorities. For instance, while poverty alleviation, health-care provision, infrastructure development and education may be high on many developing country agendas, this stands in stark contrast to many Western CSR priorities such as consumer protection, fair trade, green marketing, climate change concerns, or socially responsible investments. Stephen Schmidheiny questions the appropriateness of imported CSR approaches, citing examples from Latin America where pressing issues like poverty and tax avoidance are central to CSR, but often remain left off of international CSR agendas.

4. Governance gaps

CSR is frequently seen as a way to plug the ‘governance gaps’ left by weak, corrupt, or under-resourced governments that fail to adequately provide various social services (housing, roads, electricity, health care, education, etc.). Academics Dirk Matten and Jeremy Moon see this as part of a wider trend in developing countries with weak institutions and poor governance, in which responsibility is often delegated to private actors, be they family, tribe, religion, or increasingly, business. A survey by WBCSD illustrates this: when asked how CSR should be defined, Ghanaians stressed ‘building local capacity’ and ‘filling in when government falls short’ …

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[button size=”small” color=”blue” style=”download” new_window=”false” link=”http://www.waynevisser.com/wp-content/uploads/2012/04/blog_business_case_wvisser.pdf”]Pdf[/button] What Drives the Business Case for CSR? (blog)

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Visser, W. (2012) What Drives the Business Case for CSR? Wayne Visser Blog Briefing, 10 April 2012.

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Open Sourcing Sustainability

Open Sourcing Sustainability:

Web 2.0 Meets CSR 2.0

Blog by Wayne Visser

Part 9 of 13 in the Age of Responsibility Blog Series for 3BL Media.

CSR 2.0 responsiveness goes beyond traditional partnerships and CSO effectiveness; it is also about innovative ways to collaborate. I want to flag several Web 2.0 inspired experiments in responsiveness that are opening up sustainability and responsibility solutions to the public. One is a platform called the Eco-Patent Commons, which allows companies to share their intellectual property for the common good. The Commons was launched by WBCSD and covers issues like waste, pollution, global warming and energy. ‘The premise of the Commons,’ says Björn Stigson, president of the WBCSD, ‘is that the free sharing of these patents leads to new collaborations and innovation aimed at helping others become more eco-efficient and/or operate in a more sustainable way.’

The Eco-Patent Commons’ publicly searchable database already contains over one hundred eco-friendly patents from companies like Bosch, Dow, DuPont, Fuji Xerox, Hitachi, HP, IBM, Nokia, Pitney Bowes, Ricoh, Sony and Taisei. Xerox, for example, has eleven pledged patents that cover a process that cuts the time it takes to remove toxic waste from soil and water from years to months, as well as a patent that covers technology that makes magnetic refrigeration less harmful to the environment.

Dr. John E. Kelly III, IBM Senior Vice President and Director of IBM Research, believes that ‘innovation to address environmental issues will require both the application of technology as well as new models for sharing intellectual property among companies in different industries … In addition to enabling new players to engage in protecting the environment, the free exchange of valuable intellectual property will accelerate work on the next level of environmental challenges.’

Similarly, Donal O’Connell, Director of Intellectual Property for Nokia, thinks that ‘environmental issues have great potential to help us discover the next wave of innovation because they force us all to think differently about how we make, consume and recycle products.’ Nokia have pledged a patent designed to help companies safely re-use old mobile phones by transforming them into new products like digital cameras, data monitoring devices or other electronic items. ‘Recycling the computing power of mobile phones in this way could significantly increase the reuse of materials in the electronics industry’, concludes O’Connell.

Even more significant than the individual patents that have been added is the shift in thinking that this signals among some of the largest companies in the world. It is true none of them are exactly ‘giving away the family silver’ – they are not opening all their patents – but they are demonstrating responsiveness on a scale never seen before. They are recognising that the global problems we face are larger than whatever individual solutions can accomplish. If we are truly going to be effective in tackling our most intractable challenges, we will need the wisdom of crowds and the collective efforts of millions of entrepreneurs …

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[button size=”small” color=”blue” style=”tick” new_window=”false” link=”http://www.csrinternational.org”]Link[/button] CSR International (website)

[button size=”small” color=”blue” style=”tick” new_window=”false” link=”http://www.waynevisser.com/books/the-age-of-responsibility”]Link[/button] The Age of Responsibility (book)

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Visser, W. (2012) Open Sourcing Sustainability: Web 2.0 Meets CSR 2.0, Wayne Visser Blog Briefing, 3 April 2012.

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The Long Tail of CSR

The Long Tail of CSR:

When Smaller is Bigger

Blog by Wayne Visser

Part 8 of 13 in the Age of Responsibility Blog Series for 3BL Media.

Is bigger always better or can we still say ‘small is beautiful’, as the pioneering economist E.F. Schumacher argued way back in 1973? Certainly, the ‘muesli-eating, sandal-wearing’ New Age approach to small-is-beautiful has been rather more of an advert for ‘small is groovy, but ultimately ineffectual’. But what if we could do both big and small at the same time?

I discussed the issue of scalability with Simon Zadek, a widely respected thought leader on the civil corporation and accountability, who posed the rhetorical question: ‘Is scale large institutional functionality, or is it a flotilla of little boats?’ This is where Chris Anderson’s Web 2.0 concept of ‘the long tail’ is very useful. The Long Tail – named after the extended tail of a statistical distribution curve – is the idea that selling less to more people is big business. It’s the business model that has spawned the most successful companies of the Web 2.0 age. The Long Tail questions the conventional wisdom that says success is about generating ‘blockbusters’ and ‘superstars’ – those rare few products and services that become runaway bestsellers.

Anderson sums up his message by saying that: 1) the tail of available variety is longer than we think; 2) it’s now within reach economically; and 3) all those niches, when aggregated, can make up a significant market. He also notes that this Long Tail revolution has been made possible by the digital age, which has dramatically reduced the costs of customised production and niche distribution. There are three enablers of successful long tail businesses, according to Anderson: 1) democratising the tools of production (e.g. digi-cams, content editing software, blogging tools); 2) democratising the tools of distribution (e.g. Amazon, eBay, iTunes, Netflix); and 3) connecting supply and demand (e.g. Google, blogs, Rotten Tomatoes).

So I got to wondering: Is there a Long Tail of CSR? And if so, what does it look like? To me, the Long Tail of CSR is all about extending the reach of CSR, and improving its ability to satisfy specific social and environmental needs. Let’s use Anderson’s enablers as a framework for thinking about this.

Democratising the tools of CSR production

This is about breaking CSR silos and extending CSR beyond multinationals. At the early stages of CSR adoption, it is often confined to Public Relations, Corporate Affairs or Marketing departments. As CSR implementation matures, responsibility tends to migrate to specialised CSR departments of various descriptions (environment, health & safety, accountability, corporate citizenship, etc.). However, these versions of CSR are like the Hollywood model of blockbuster films. They suggest that CSR is about a few, high visibility programmes that are designed by CSR experts and delivered by big companies.

By contrast, democratising CSR production would mean firstly embedding CSR across the organisation – making it the responsibility of operations managers, financial managers, shop floor workers, basically everyone. This is only possible if CSR becomes part of the culture and incentive systems of an organisation. CSR would also need to be extended beyond the usual suspects (i.e. the high profile, branded multinationals) to the less visible B2B (business to business) and national (rather than multinational) organisations, as well as to SMEs (small and medium sized enterprises) and down the supply chain …

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Related websites

[button size=”small” color=”blue” style=”tick” new_window=”false” link=”http://www.csrinternational.org”]Link[/button] CSR International (website)

[button size=”small” color=”blue” style=”tick” new_window=”false” link=”http://www.waynevisser.com/books/the-age-of-responsibility”]Link[/button] The Age of Responsibility (book)

Cite this blog

Visser, W. (2012) The Long Tail of CSR: When Smaller is Bigger, Wayne Visser Blog Briefing, 27 March 2012.

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Nature vs. Nurture

Nature vs. Nurture:

Are Social Entrepreneurs Born or Made?

Blog by Wayne Visser

Part 7 of 13 in the Age of Responsibility Blog Series for 3BL Media.

What do Taddy Blecher, Anurag Gupta, Wang Chuan-Fu and all of the other social entrepreneurs have in common? Is this a special breed of human being? Are social entrepreneurs born or can they be made? In the academic literature, there is an interesting thread of research that is around the concept of ‘champions’ in organisations, especially ‘environmental champions’. The idea draws on prior conceptions of the human resources champion in the 1970s and 1980s, before HR became institutionalised.

Academics define environmental champions as people who can attractively express a personal vision about environmental protection that is in tune with both industry’s needs and wider public concern and who convince and enable organisation members to turn environmental issues into successful corporate programs and innovations. Environmental champions have been showed to imbue a combination of characteristics, including being a catalyst, champion, sponsor, facilitator and demonstrator. Their skills include the ability to identify, package and sell environmental issues within their organisations.  Their effectiveness in engaging others rests heavily on expertise, top management support and a strong appreciation for the problems that every business unit or operations manager faces.

Research on champions is not confined purely to the environmental dimension of sustainability. Others have written about socially responsible change-agents, as well as managers’ individual discretion as a component of corporate social performance. British academic Christine Hemingway, for example, finds that CSR can be the result of championing by a few managers, based on their personal values and beliefs, despite the personal and professional risks this may entail. Individual managers are also often mediators in corporate philanthropy and stakeholder influence. Hence, the notion of CSR champions has emerged as an important concept, which I will return to this in the final blog on individual change agents.

Bill Drayton, who has been involved in selecting and tracking the progress of the 2,700 Ashoka Fellows, believes social entrepreneurs ‘focus everyday on the “how to” questions. How are they going to get from here to their ultimate goal? How are they going to deal with this opportunity or that barrier? How are the pieces going to fit together? They are engineers, not poets. … The entrepreneur’s job is not to take an idea and then implement it. That is what franchisees do. The entrepreneur is building something that is entirely new – by constantly creating and testing and recreating and then testing and recreating again’ …

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[button size=”small” color=”blue” style=”tick” new_window=”false” link=”http://www.waynevisser.com/books/the-age-of-responsibility”]Link[/button] The Age of Responsibility (book)

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Visser, W. (2012) Nature vs. Nurture: Are Social Entrepreneurs Born or Made, Wayne Visser Blog Briefing, 20 March 2012.

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CSR 2.0: The New DNA

CSR 2.0 as the New DNA of Business

Blog by Wayne Visser

Part 6 of 13 in the Age of Responsibility Blog Series for 3BL Media.

By May 2008, it was clear to me that the evolutionary concept of Web 2.0 held many lessons for CSR, and I began to develop my thinking around CSR 2.0. It quickly became clear, however, that a metaphor can only take you so far. What was needed was a set of principles against which we could test CSR. These went through a few iterations, but I eventually settled on five, which form a kind of mnemonic for CSR 2.0: Creativity (C), Scalability (S), Responsiveness (R), Glocality (2) and Circularity (0). These principles, which will be explored in detail in the next chapters, can be described briefly as follows:

Creativity  – The problem with the current obsession with CSR codes and standards (including the new ISO 26000 standard) is that it encourages a tick-box approach to CSR. But our social and environmental problems are complex and intractable. They need creative solutions, like Free-play’s wind-up technology or Vodafone’s M-Pesa money transfer scheme.

Scalability – The CSR literature is liberally sprinkled with charming case studies of truly responsible and sustainable projects. The problem is that so few of them ever go to scale. We need more examples like Wal-Mart ‘choice editing’ by converting to organic cotton, Tata creating the affordable eco-efficient Nano car or Muhammad Yunus’s Grameen microfinance model.

Responsiveness – More cross-sector partnerships and stakeholder-driven approaches are needed at every level, as well as more uncomfortable, transformative responsiveness, which questions whether particular industries, or the business model itself, are part of the solution or part of the problem. A good example of responsiveness is the Corporate Leaders Group on Climate Change.

Glocality – This means ‘think global, act local’. In a complex, interconnected, globalising world, companies (and their critics) will have to become far more sophisticated in combining international norms with local contexts, finding local solutions that are culturally appropriate, without forsaking universal principles. We are moving from an ‘either-or’ one-size-fits-all world to a ‘both-and’ strength-in-diversity world.

Circularity – Our global economic and commercial system is based on a fundamentally flawed design, which acts as if there are no limits on resource consumption or waste disposal. Instead, we need a cradle-to-cradle approach, closing the loop on production and designing products and processes to be inherently ‘good’, rather than ‘less bad’, as Shaw Carpets does.

I believe that CSR 2.0 – or Systemic CSR (I also sometimes call it Radical CSR or Holistic CSR, so use whichever you prefer) – represents a new model of CSR. In one sense, it is not so different from other models we have seen before. We can recognise echoes of Archie Carroll’s CSR Pyramid, Ed Freeman’s Stakeholder Theory, Donna Wood’s Corporate Social Performance, John Elkington’s Triple Bottom Line, Stuart Hart and C.K. Prahalad’s Bottom of the Pyramid, Michael Porter’s Strategic CSR and the ESG approach of Socially Responsible Investment, to mention but a few. But that is really the point – it integrates what we have learned to date. It presents a holistic model of CSR.

The essence of the CSR 2.0 DNA model are  …

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[button size=”small” color=”blue” style=”tick” new_window=”false” link=”http://www.csrinternational.org”]Link[/button] CSR International (website)

[button size=”small” color=”blue” style=”tick” new_window=”false” link=”http://www.waynevisser.com/books/the-age-of-responsibility”]Link[/button] The Age of Responsibility (book)

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Visser, W. (2012) CSR 2.0 as the New DNA of Business, Wayne Visser Blog Briefing, 13 March 2012.

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Cracking the CSR Codes Puzzle

Cracking the CSR Codes Puzzle

Blog by Wayne Visser

Part 5 of 13 in the Age of Responsibility Blog Series for 3BL Media.

Looking back, we can see that the 1990s were the decade of CSR codes – not only EMAS, ISO 14001 and SA 8000, but also the Forest Steward Council (FSC) and Marine Stewardship Council (MSC) Certification Schemes, Green Globe Standard (tourism sector), Corruption Perceptions Index, Fairtrade Standard, Ethical Trading Initiative, Dow Jones Sustainability Index and OHSAS 18001 (health & safety), to mention just a few. But all that was just a warm up act when we look at the last 10 years, when we have seen codes proliferate in virtually every area of sustainability and responsibility and all major industry sectors. So much so that in the A to Z of Corporate Social Responsibility, we included over 100 such codes, guidelines and standards – and that was just a selection of what it out there. To illustrate the point, here is a sample of what has been thrust onto corporate agendas since the year 2000:

The Carbon Disclosure Project; Global Alliance for Vaccines and Immunisation; GRI Sustainability Reporting Guidelines; Kimberley Process (to stop trade in conflict diamonds); Mining and Minerals for Sustainable Development (MMSD) Project; UN Global Compact; UN Millennium Development Goals; Voluntary Principles on Human Rights; FTSE4Good Index; Global Business Coalition on HIV/AIDS; Global Fund to Fight AIDS, Tuberculosis and Malaria; Business Principles for Countering Bribery; Publish What Pay Campaign; Johannesburg Declaration on Sustainable Development; London Principles (finance sector); AA 1000 Assurance Standard; Equator Principles (finance sector); Extractive Industries Transparency Initiative (EITI); Roundtable on Sustainable Palm Oil; Global Corruption Barometer; UN Convention Against Corruption; UNEP Finance Initiative; UN Norms on Business and Human Rights; World Bank Extractive Industries Review; AA 1000 Standard for Stakeholder Engagement; EU Greenhouse Gas Emissions Trading Scheme; Millennium Ecosystem Assessment; ISO 14064 Standard on Greenhouse Gas Accounting and Verification; Stern Review on the Economics of Climate Change; Bribe Payers’ Index; UN Principles for Responsible Investment; ClimateWise Principles (insurance sector); UNEP Declaration on Climate Change; UN Principles for Responsible Management Education (PRME); Bali, Poznan and Copenhagen Communiqués (climate change) … and many, many more.

No wonder companies are suffering from code fatigue and audit exhaustion. It is the supreme paradox of the Age of Management – companies are pressured to standardise their efforts on sustainability and responsibility, while stakeholders and critics (myself included) remain unconvinced that this approach identifies or addresses the root causes of the problems we face. Many of the institutional failures over the past 20 years have, I would argue, been systemic failures of culture, rather than bureaucratic failures of management; they have more to do with a prevailing set of values than a particular set of procedures.

The latest in this code-mania is ISO 26000 on Social Responsibility. I have suggested before that ISO 26000 is like a teddy bear – something cute and fluffy, which may help companies sleep better at night, but nothing like the grizzly bear that we really need to shake business out of their CSR complacency. Of course, it is unfair of me to make so …

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[button size=”small” color=”blue” style=”download” new_window=”false” link=”http://www.waynevisser.com/wp-content/uploads/2012/04/blog_codes_wvisser.pdf”]Pdf[/button] Cracking the CSR Codes Puzzle (blog)

Related websites

[button size=”small” color=”blue” style=”info” new_window=”false” link=”http://www.csrinternational.org/”]Website[/button] CSR International (website)

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Visser, W. (2012) Cracking the CSR Codes Puzzle, Wayne Visser Blog Briefing, 7 March 2012.

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Broken Promises

Broken Promises:

BP’s Slide Backwards into Promotional CSR

Blog by Wayne Visser

Part 4 of 13 in the Age of Responsibility Blog Series for 3BL Media.

By 2000, John Browne, then-CEO of BP, felt the company had earned enough sustainability kudos to risk a major rebranding. The company reportedly spent $7 million in researching the new ‘Beyond Petroleum’ Helios brand and $25 million on a campaign to support the brand change. When Browne justified the exercise by saying ‘it’s all about increasing sales, increasing margins and reducing costs at the retail sites’, perhaps more people should have tempered their expectations. Certainly Greenpeace wasn’t duped, concluding at the time that ‘this is a triumph of style over substance. BP spent more on their logo this year than they did on renewable energy last year’.

Antonia Juhasz, author of The Tyranny of Oil (2008), was similarly sceptical, claiming that at its peak, BP was spending 4% of its total capital and exploratory budget on renewable energy and that this has since declined, despite Browne’s announcement in 2005 of BP’s plans to double its investment in alternative and renewable energies ‘to create a new low-carbon power business with the growth potential to deliver revenues of around $6 billion a year within the next decade.’

Sceptics notwithstanding, Browne had earned his new title as the ‘Sun King’ and his reputation was not only being earned with green stripes. BP was also one of the first companies to declare their support for the Publish-What-You-Pay campaign.  But success or failure is all about timing. If Browne had been a politician and had retired in 2003 after two four-year terms of office, he may still have been covered in glory, with his Sun King crown firmly in place. After all, he had turned BP into an oil major – perhaps even a competitor for Exxon Mobil – by creating a lean, mean, green machine. Instead, he hung onto power long enough to face the consequences of his own legacy of cost-cutting and rhetoric. As a result, between 2004 and 2007, the proverbial chickens came home to roost. Browne was left tarred and feathered.

On 23 March 2005, when an explosion and fire at BP’s Texas City refinery killed 15 workers and injured more than 170 others. An investigation into the accident by the Occupational Safety and Health Administration (OSHA) ultimately found over 300 safety violations and fined BP $21 million – the largest fine in OSHA history at the time. In 2007, in a separate settlement related to the explosion, BP pleaded guilty to a violation of the federal Clean Air Act and agreed to pay a $50 million fine and to make safety upgrades to the plant. Two years later, in 2009, OSHA imposed an additional $87 million in fines, claiming that the company had not completed all the safety upgrades required under the agreement and alleging 439 new ‘wilful’ safety violations.

In March 2006, BP was found to be criminally liable for  …

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[button size=”small” color=”blue” style=”download” new_window=”false” link=”http://www.waynevisser.com/wp-content/uploads/2012/04/blog_bp_wvisser.pdf”]Pdf[/button] Broken Promises (blog)

Related websites

[button size=”small” color=”blue” style=”info” new_window=”false” link=”http://www.csrinternational.org/”]Website[/button] CSR International (website)

[button size=”small” color=”blue” style=”tick” new_window=”false” link=”http://www.waynevisser.com/books/the-age-of-responsibility”]Page[/button] The Age of Responsibility (book)

Cite this blog

Visser, W. (2012) Broken Promises: BP’s Slide Backwards into Promotional CSR, Wayne Visser Blog Briefing, 28 February 2012.

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Give a Man the Means to Fish

Give a Man the Means to Fish:

From Paternalistic Charity to Venture Philanthropy

Blog by Wayne Visser

Part 3 of 13 in the Age of Responsibility Blog Series for 3BL Media.

Give a man a fish and he will eat today. Teach a man to fish and he will eat tomorrow – or until his nets break. Invest in a man’s fishing business and he will feed himself and others for a long time to come. This is what it means to shift from paternalistic charity to venture philanthropy. It is an evolution that is important to root in a long and varied cultural tradition of philanthropy.

Confucius (551-479 BC) said: ‘When wealth is centralized, the people are dispersed. When wealth is distributed, the people are brought together.’ Hence, ‘a man of humanity is one who, in seeking to establish himself, finds a foothold for others and who, desiring attainment for himself, helps others to attain.’ When asked, ‘Is there one word which may serve as a rule of practice for all one’s life?’ he replied, ‘Is not reciprocity such a word? What you do not want done to yourself, do not do to others’.

This so-called Golden Rule, which we find in all the world’s major religions, has come to represent the very essence of charity. In fact, the word charity derives from Latin caritas, which meant preciousness, dearness, or high price. However, in Christian theology, caritas became the standard Latin translation for the Greek word agapē, meaning an unlimited loving-kindness to all others. Hence, in St Paul’s Letter to the Corinthians, we read, in the King James Version of the Bible, of ‘faith, hope and charity’. Of course, it is not only giving that is important, but also the nature of giving. There is a Jewish proverb that says: What you give for the cause of charity in health is gold; what you give in sickness is silver; what you give after death is lead.

Islam also has a strong tradition of charity. Zakāt, or alms-giving for the purposes of alleviating poverty and helping those less fortunate, is one of the Five Pillars of Islam. The practice is generally in the form of an annual tithe or tax of 2.5% of an individual’s wealth, including money made through business, savings and income. The zakāt must also be above an agreed minimum (called nisab), which is said to be around $2,640 or the equivalent in any other currency. As important as the collection of zakāt in a community is its fair distribution among the needy. Another form of charitable action is sadaqah, which literally means ‘righteousness’ and refers to the voluntary giving of alms or charity. These ancient traditions are considered to be a personal responsibility for all Muslims, practiced out of love for humanity, to ease economic hardship for others and eliminate inequality.

There are numerous other religious and cultural variations on the theme. Philanthropy in Latin America typically revolves around asistencialismo, which is charitable giving for poverty alleviation. Out of dedication to their religion, education and culture, Bulgarian communities raised donations to build churches, schools and cultural centres called chitalishta. In India, Gandhi’s trusteeship concept was adapted and applied to welfare acts. In Mexico, the Raramori, who still live in the mountains of the state of Chihuahua, use the expression korima, which means ‘to share’ resources in times of stress. In Southern Africa, ubuntu is the practice of humanism based on the collectivist notion that ‘I am a person through other people’.

So much for the roots and cultural traditions of philanthropy. Upon these foundations, the great philanthropists, ancient and modern, built their charities – from Rockefeller and Carnegie to Gates and Turner. The more interesting question, I think, is whether there is anything new and transformative about charitable giving? …

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[button size=”small” color=”blue” style=”info” new_window=”false” link=”http://www.csrinternational.org/”]Website[/button] CSR International (website)

[button size=”small” color=”blue” style=”tick” new_window=”false” link=”http://www.waynevisser.com/books/the-age-of-responsibility”]Page[/button] The Age of Responsibility (book)

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Visser, W. (2012) Give a Man the Means to Fish: From Paternalistic Charity to Venture Philanthropy, Wayne Visser Blog Briefing, 21 February 2012.

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Fat Cats versus Alley Cats

Fat Cats versus Alley Cats:

Why the Occupy Movement is Right

Blog by Wayne Visser

Part 2 of 13 in Wayne Visser’s Age of Responsibility Blog Series for 3BL Media.

The most common explanation for the global financial crisis is to point a finger at the banks. And rightly so. But I believe we also need to shine a spotlight on the greed and irresponsibility of executives, fat-cats like Lehman Brothers’ former CEO Richard Fuld. These are the enriched 1% that suck the lifeblood out of the fleeced 99% and which the Occupy Movement is justifiably targeting. Naming and shaming is important, but we need to realise that this is a systemic cancer in our economic and financial system.

It is also not a new phenomenon, but worrying it is showing signs of getting worse, not better. In 2000, Enron was the 7th largest company in America, with revenues of $111 billion and over 20,000 staff. When the company collapsed in 2001, due to various fraudulent activities fuelled by a culture of greed, the average severance payment was $45,000, while executives received bonuses of $55 million in the company’s last year. Employees lost $1.2 billion in pensions; retirees lost $2 billion, but executives cashed in $116 million in stocks.

At the end of 2007, just before the crisis went public, Lehmans’ CEO Fuld and president Joseph Gregory paid themselves stock bonuses of $35 million and $29 million respectively. At the time, Fuld lived in an enormous Greenwich mansion, over 9,000 square feet, valued at $10 million. He had four other homes and an art collection valued at $200 million. Hardly a picture of responsible restraint.

Taken on their own, these executive pay packages are outrageous enough. But the extent of creeping executive greed comes into even sharper focus when we look at trends in relative pay. In 1965, U.S. CEOs in major companies earned 24 times more than a typical worker, a ratio that grew to 35 in 1978 and to 71 in 1989. By 2000, it had hit 298, and despite falling to 143 in 2002 (after the post-Enron stock market slump), it bounced back again and has continued rising through the noughties (2000s).

The Institute for Policy Studies Executive Excess report reveals that the 2010 ratio between average worker and average CEO compensation leaped to 325-to-1, up from in 263-to-1 in 2009. Among the nation’s top firms, the S&P 500, CEO pay last year averaged $10,762,304, up 27.8 percent over 2009. Average worker pay in 2010? That finished up at $33,121, up just 3.3 percent over the year before.

According to Fair Economy, the average U.S. worker’s salary could pay for 10 months of health insurance, 5 months of college tuition, and buy 10 percent of an average home. On the other hand, the average Fortune 500 CEO’s salary could pay for 300 years of health insurance, 200 years of college tuition and buy 34.5 new homes.

But at least these CEOs are contributing through taxes, right? Wrong. In fact, corporate  …

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[button size=”small” color=”blue” style=”download” new_window=”false” link=”http://www.waynevisser.com/wp-content/uploads/2012/04/blog_fat_cats_wvisser.pdf”]Pdf[/button] Fat Cats versus Alley Cats (blog)

Related websites

[button size=”small” color=”blue” style=”info” new_window=”false” link=”http://www.csrinternational.org/”]Website[/button] CSR International (website)

[button size=”small” color=”blue” style=”tick” new_window=”false” link=”http://www.waynevisser.com/books/the-age-of-responsibility”]Page[/button] The Age of Responsibility (book)

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Visser, W. (2012) Fat-Cats versus Alley-Cats: Why the Occupy Movement is Right, Wayne Visser Blog Briefing, 14 February 2012.

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