Vol. 4 No. 4 – July/August 2013

Nonprofit Motive

What for-profits can learn from the likes of NGOs.

By Melissa Fleming

Consumers are demanding corporate social responsibility from the companies whose products or services they purchase. According to the 2013 Cone Communications/EchoGlobal CSR Study, 91 percent of consumers are likely to switch brands to one associated with a good cause, and only 7 percent think it’s enough for companies to engage in issues through donations. Nonprofits have developed approaches and skills that for-profits could benefit from as well:

Compelling mission—internal benefits. Most people want to do work that really matters. Working for a nonprofit is rewarding, because the organization has meaning built into its mission.

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The eBay Way

CEO John Donahoe on transformation and interconnection.

By Dirk Olin

John Donahoe has been President and CEO of eBay Inc. since March 31, 2008. UnderDonahoe's leadership, the company has become a global commerce platform and payments leader, with revenue in 2012 of $14.1 billion. Across its eBay, PayPal and eBay Enterprise platforms, the company enabled $175 billion of commerce in 2012, which represents about 18 percent of e-commerce worldwide and about 2 percent of global retail. The company also is a mobile commerce leader, with eBay mobile commerce volume of $13 billion in 2012, and PayPal mobile payments volume of $14 billion. The company is focused on enabling commerce as a partner — not a competitor — to sellers of all sizes, from entrepreneurs and small businesses, to global brands and retailers.

He  joined eBay in March 2005 as President of eBay Marketplaces, responsible for all elements of the company’s global ecommerce businesses.

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Foundation Formation

eBay’s Head of Social Innovation gives up the goods.

By Dirk Olin

Lauren Moore runs global Social Innovation for eBay Inc., which includes oversight of the company’s giving activities. Part of Starbucks’ first CR team before joining eBay she had a background in the environmental community and community affairs. She recently answered a few more granular questions about eBay’s CR initiatives.

How do you bring the compliance side of CR to your workforce?
Each year, we have comprehensive compliance training requirements, which go to our inboxes. You receive different modules depending on your level or responsibility or reach within company—in areas such as ethics, diversity, sexual harassment. And you receive a lot of emails reminding you if you haven’t done it yet. And it comes up throughout the year. Both outsourced and tailored, they’re made very specific for us.

What about your environmental footprint?
Carbon and energy receive the most focus on that front.

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2013 Black List

Our annual inventory of America’s least transparent big-cap companies.

By Dirk Olin

The 2013 Black List

Affiliated Managers Group Inc. AMG
Alleghany Corp. Y
American Capital Agency Corp AGNC
Annaly Capital Management Inc NLY
Ares Capital Corp ARCC
Axis Capital Holdings Ltd AXS
Brown & Brown, Inc. BRO
Chimera Investment Corp. CIM
FleetCor Technologies, Inc. FLT
Hatteras Financial Corp HTS
Lazard Ltd. LAZ
Liberty Interactive Corporation LINTA
LinkedIn Corp. LNKD
MFA Financial Inc. MFA
Monster Beverage Corp. MNST
Partnerre Ltd. PRE
Proassurance Corporation PRA
Retail Properties of America, Inc. RPAI
Silgan Holdings Inc. SLGN
White Mountains Insurance Group, Ltd. WTM

What I Saw at the Revolution

A former CR practitioner looks back on the movement’s antecedents—and revival.

By Tom Kiely

Corporate social responsibility, sustainability, and shared value are terms I use all the time but don’t much like. Many people say (and I’ve joined this chorus) that the terms come loaded with too many meanings, have roots too deep in frameworks and concepts long-since outdated, and thus are only useful today in a short-hand kind of way. They are terms that seem to require clarification. “By CSR I mean…and I don’t mean…”

Terms and concepts won’t settle to clarity soon. During the last decade, momentum of activity and thinking within the business community on a broad range of issues that are clustered behind these terms has increased markedly. The number of late-comers (including me) who pitched in to help build on the work of others has been accelerating, as have the commitments of many executives and the attention of investors.

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All That Glitters

The many facets of ethics in the jewelry sector.

By Effie Marinos

Jewelry arouses strong emotions in consumers. Whether given as a gift or a reward, it is a symbol of luxury and exclusivity, an image propagated in advertising and PR by an industry eager to build on such perceptions. This is the factor that has driven demand in economies such as China, Russia, Brazil, and India, where aspirational purchasing by the growing middle classes accounts for the increasing size of the luxury market. This is in marked contrast to the lackluster demand for luxury goods in the developed markets of North America, Western Europe, and Japan, as jittery middle class consumers there have reined in discretionary spending in the face of rising inflation and mounting insecurity over jobs and pensions.

But jewelers are confronting issues at odds with the glamour evoked by their products. Questions regarding the origin of their raw materials and the suggestion that payments might be used to fund conflict, terrorism, and other illegal activities undercut companies’ reputations and can threaten the industry as a whole.

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Context Is King

GRI’s reporting guidelines are highly laudable. And insufficient.

By Mark W. McElroy and Jo M. L. von Engelen

Previously, we called attention to three rules for sustainability performance put forward by the famous ecological economist Herman Daly, all of which deal only with impacts on natural capital. Here we want to address the question of whether or not there can be rules of a similar kind for impacts on anthro capital. Indeed we think there can be. Before explaining what we think they are, however, here again are Daly’s rules for impacts, as neatly summarized in Beyond the Limits to Growth by Donella H. Meadows, Dennis L. Meadows, and Jørgen Randers: “In order to be physically sustainable [a] society’s material and energy throughputs would have to meet Daly’s three conditions: Its rates of use of renewable resources do not exceed their rates of regeneration; its rates of use of nonrenewable resources do not exceed the rate at which sustainable renewable resources are developed; its rates of pollution emission do not exceed the assimilative capacity of the environment.

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The Measurement Movement

Tell the CEO to ask tough questions about your giving gauges.

By Daryl Brewster

Companies, and by extension the CEOs who lead them, are driven by measurement—they live and die by quarterly earnings, revenue forecasts, and ROI predictions. But in many cases, corporate philanthropy programs are still judged by “soft” measures that often consist of testimonials and anecdotes. Many CEOs might not realize that these programs are increasingly managed using robust accountability and benchmarking methods.

The level of sophistication has increased quickly. In fact, CEOs can help encourage the acceleration of data-based decision-making by asking quantitative questions in programmatic reviews and encouraging the entire company—including the rest of the C-suite—to think about community engagement as one of the company’s most important investments.

Many of CECP’s more than 150 member companies tell us that before they participated in our annual Corporate Giving Standard (CGS) survey—designed to track changes in giving over time—they could not accurately capture the myriad ways they were giving, because it was too decentralized and reactive.

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CR 3.0: Good & Networked

Visibility, connectivity, instantaneity, and scale—welcome to the new world of corporate citizenship.

By Richard Crespin

Neanderthals, once regarded as the bigger, dumber, slower precursor to us Homo sapiens, might have actually been stronger, smarter, and faster than us. But the archeological record shows that every time Homo sapiens encroached on Neanderthal, Neanderthal eventually died out. The working theory: while smaller in both body and brain, Homo sapiens out-collaborated the more hermetic Neanderthal. Our principle competitive advantage as a species is our ability to collaborate. In fact, an increasing body of evidence across multiple fields of study shows that the propensity to collaborate has a profound impact on the success or failure of human endeavors, including corporate responsibility.

In a forthcoming study by the U.S. Chamber of Commerce Foundation, the research team (of which I was part) found that leaders in corporate responsibility are borrowing a number of lessons from other parts of business on collaboration in general and on how to use “network effects” in particular.

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The New CR

How collaborative responsibility can help return military veterans to the workforce.

By Michelle Greene

Collaborative responsibility involves multiple companies in the private sector working together—often in conjunction with government or non-profit organizations—to collectively address a societal problem that no single entity can solve alone. It can be one of the most effective approaches in corporate responsibility, leveraging the deep commitment, drive, and leadership of one or a small group of organizations to motivate a much larger group to action. What is asked of the larger group might be small, but the impact can be huge because of the potential scale.

Creating employment opportunities for military veterans is an excellent example. It also hits the trifecta of effective corporate responsibility—providing benefits to companies, creating meaningful opportunities for rewarding employee engagement, and helping communities more broadly. Veterans possess skills and a work ethic that can be of great value to corporations and the private sector.

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