Vol. 8 No. 3 – May/June 2017

First 100 Days in Office

Alphabetsoup2 A CR leader under fire and the alphabet soup of standards organizations By the Editors He’s the new chief executive and his 100-day anniversary was fast approaching. Many miles from the familiar trappings of his hometown, he has uprooted his family and inherited all the successes—as well as the baggage—of preceding administrations. Yet despite having more power and influence than other world leaders, critics abound. No, this is not a story about the occupant of 1600 Pennsylvania Avenue. Rather, the man experiencing a tumultuous honeymoon as CEO of the Global Reporting Initiative (GRI) is Tim Mohin. Hired by the GRI’s board late last year, the longtime corporate responsibility practitioner and his wife moved from Austin, Texas, to the independent standards organization’s headquarters in Amsterdam in January. Comparisons to the Donald Trump election have been coming ever since. “I have yet to sign any executive orders,” Mohin chuckled during an interview at the annual conference of Ceres, the NGO that launched GRI in 1997.

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The 2017 Most Responsible Companies Ranked by Industry Sector – Energy

logo The top corporations dedicated to sustainability in the energy category CR Magazine has put together its annual set of the “2017 Most Responsible Companies Ranked by Industry Sector” list. This list serves to help readers establish that their supply chain is comprised of the most responsible, sustainable, and transparent companies—creating shared value when strategic opportunities arise. In past years, this ranked list includes the top 12 companies in all 11 industry categories. This year, we are going to break down the list to feature one industry sector per magazine, to bring more attention to the category as a whole. In this issue we focus on “Energy.” To view the 2017 list, click here. For these compilations, we use the same methodology as the “100 Best Corporate Citizens List,” with one additional data slice. The Best Corporate Citizens database comprises publicly available data from Russell 1000 companies collected and analyzed by IW Financial, a Portland, Maine-based financial analysis firm serving the environment, social, and governance (ESG) investment community.

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Brands Taking Stands

ClimateChange U.S. companies are speaking out on divisive hot button issues By Tom Idle “In this present crisis, government is not the solution to our problem; government is the problem.” This sentence in Ronald Reagan’s inaugural address of 1981, which poured ire on the notion of ‘big government,’ has stayed with many Americans to this day. In fact, almost 70 percent of people see government intervention (or otherwise) as the greatest threat to the nation, according to the latest Gallup poll on the subject, compared with just 26 percent who think it’s big business. It is little wonder then that politicians—from both the left and right sides of the political spectrum—have long banged the anti-corporate drum in the apparent hope of shifting attention away from themselves. Questioning the role, size and influence of business in society has become the political playground game of choice.

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Showing up Matters

CapitolHill2 The C-suite at leading companies commit to lobbying on important issues By the Editors Job descriptions for corporate responsibility practitioners commonly include references to supply chain, community engagement and sustainability reporting. Add lobbying to the list. “We have our story to tell and no one can tell that story except for us,” Rachelle Reyes Wenger, Dignity Health director of public policy and community advocacy, says of the sharp uptick in lobbying lawmakers around the Affordable Care Act.  “They don’t know. It’s our job to help them understand why it matters to us.” With a new president and Republican-controlled Congress looking at a healthcare insurance overhaul and rollbacks in environmental regulations, corporate spending on lobbying is up in the first quarter, according to watchdogs like the Center for Responsible Politics. Pharmaceutical and healthcare giants are joined by telecommunications companies, industry trade associations and defense contractors on the list of the 10 top spenders who are working Capitol Hill.

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Well Dressed: The founder of Ramblers Way discusses whether our clothing defines our values or if our values should define our clothing

Ramblers Way By the Editors There are 80 billion pieces of clothing purchased worldwide each year but rarely do consumers consider the true cost of this. From negative environmental impacts to poor factory labor practices in the developing world and growing landfills containing discarded textiles, the fast fashion industry is in need of a serious makeover. Tom Chappell, the founder of Tom’s of Maine, is part of a new way of thinking about fashion with his sustainable clothing company, Ramblers Way. A serial entrepreneur, Chappell uses his businesses as a vessel to create change that aligns with his values of caring for people, community and nature. An “ah-ha” moment came to Chappell in 2008 while hiking through the rolling pastures and steep hills of Wales with his son. The struggle to find a warm, dry and soft shirt put the wheels in motion. He embarked on his next business venture to create responsibly and skillfully crafted, American-made clothing. Founded on a bedrock of social and environmental responsibility, Ramblers Way is committed to a high standard of ethics in every aspect of the business.

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Walking the Tight Rope: The CSR case for asking about non-profit risk management

Ted Bilich By Ted Bilich Non-profits often don’t have processes for inquiring about the risks they face, prioritizing those risks, and how to responding to them. For most, risk management begins and ends with insurance, their only safety net. This leaves non-profits exposed. Because they do not have significant cash reserves, because demand for services routinely outstrips capacity, and because they perceive donors as penalizing them for spending money on “infrastructure” (including training, management, and staff development),  non-profits already resemble tight rope walkers on a windy night. And having no risk management program, however, means most non-profits wear blindfolds too. CR.MayJune2017.NonprofitRiskManagement1 Private foundations may feel comfortable providing grants in such circumstances.

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The ESG Factor: How non-financial performance reporting can build investor confidence

JohnDeRose headshot By John DeRose In the last three years, there has been an expanding role of Environmental, Social and Governance (ESG) factors in the decision-making of investors worldwide[1], according to Ernst & Young’s third Tomorrow’s Investment rules survey. At the crux of this year’s discussion was a simple question: “Is investor appetite for more integrated, predictable and strategic ESG disclosure being met by businesses?” This was a natural choice given how meaningful ESG analysis has become for institutional investors and the companies they follow. Consider a few of the recent headlines. In November 2016, Bloomberg Media declared, “Larry Fink Wants Companies to Talk More About the Future.”[2] In this case, the head of the world’s largest investment manager wrote to the CEOs of the S&P 500 companies and Europe’s largest corporations to extol the virtues of strong ESG performance and its effect on valuation.

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When Disaster Strikes: 8 questions leaders should ask before, during and after

Kathleen Lowenthal By Kathleen Lowenthal When a disaster strikes, people want to respond. They expect governments to provide immediate assistance, and individually they look for ways to help. Corporations also want to respond and assist, but leaders are faced with a mixed set of decision-making circumstances. During these complicated incidents, questions often arise about strategy, partners, opportunities and employees impacted. Business leaders need to take into account the concerns of employees, customers, and other stakeholders. They also need to consider the timing, implementation mechanism, volunteer opportunities, impact and potential reputational issues of any such endeavor. Time is of the essence. Global Impact has learned through more than a decade of disaster relief fundraising that having a decision-making process in place before disasters occur is critical to mobilizing and allocating resources effectively, and maximizing their impact. Below are key questions companies should ask themselves when considering a disaster response strategy.

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Value Added: What corporate foundations can do to enhance their philanthropic agenda

Jennifer Levine Hartz By Jennifer Levine Hartz Though corporate giving is a small percentage of all philanthropic monies given to non-profits in the U.S., it has an outsized opportunity to drive societal improvement and influence the hearts and minds of their stakeholders and the nation. (The organization Giving USA reports that about 5 percent of all philanthropy comes from companies each year.) Corporate and business owner foundations complement the work of annual social responsibility budgets. Foundations donate to non-profits to increase capacity and address targeted community needs. Corporate budgets focus on employee engagement in civic leadership, hands-on volunteering, and skills-based service, as well as involving others outside of the company. Enabling others to contribute is not a substitute for direct investments, and companies know that. Increasingly, corporations seek to extend “philanthropic leverage.” This means using their products, services and other assets to inspire all stakeholders—employees, customers, vendors, elected officials, investors and media—to become involved with specific charities or issues.

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Engage vs. Demand: Seeing the world from the eyes of your supplier

Jennifer Anderson1 By Jennifer Anderson Supply chains are a critical element of sustainability success for most companies. Yet working on supply chain sustainability is a challenging task. It’s hard enough to get people in your own company to change their behavior, but influencing the actions of those in another company—even as a large customer—can seem nearly impossible. Truth be told, sustainability management itself is messy, complicated, often frustrating work. And acknowledging that is the first step to success in engaging your suppliers. Suppliers who are not responding to your information requests or are not scoring well on your assessments are simply in the same place your company was (or maybe still is) just a few years back. If you are fortunate enough to work for a company that has a sustainability team in place, a little discussion and self-reflection can go a long way toward improving engagement with suppliers. Ask yourselves questions like: “Where do/did we struggle in accomplishing our sustainability goals?” “What helps/hurts our efforts when it comes to our relationships with our customers?” “What worked for us in overcoming challenges?” and “What did our customers do that helped us?” The answers you come up will begin to pave the way toward building a better, more productive relationship with suppliers around sustainability.

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