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By Wayne Dunn

"That is shared value not corporate social responsibility."

That is the reaction I received two weeks ago after sending a note about my value-centric approach to CSR and highlighting the economic sustainability inherent in CSR projects that have robust value propositions that can align the social, economic and developmental interests of companies, communities, shareholders and other stakeholders.

CSR is a complex, evolving and exciting area that is finding new ways to create and distribute value. Simultaneously, the language and frameworks around CSR are evolving rapidly and helping executives, practitioners and academics with practice and understanding. We are all learning and none of us is an "expert." I want to share some of my thoughts on CSR, shared value and a framework that has helped me to be more effective in this space.

The concept of shared value has been eloquently described with powerful voices that have done well to help business and society understand what it is, to think about how to develop it and realize the compelling value propositions that it can create. Professor Michael Porter and his team, through their work, their writing and the gravitas they carry, have helped many to see and think about business differently. As they wrote, shared value “generates opportunity, innovation, and competitive advantage for corporations—while solving pressing social problems.” To my thinking, this makes shared value an important aspect of CSR and good business strategy.

I believe that we do a disservice to business and corporate social responsibility if we place shared value actions outside of the scope of CSR, and I don’t think this is what Professor Porter and others intended at all.

I’ve spent a couple of decades developing, analyzing, evaluating and supporting CSR-related projects and programs around the world and across industries and sectors. Working on more than 60 projects in that time, I’ve developed some frameworks and tools that I find very helpful to allow me to analyze and understand specific situations and strategies. One I nearly always use is the CSR Value Continuum. It helps to look at the various CSR programs, projects and initiatives that a company is doing and place them on a continuum ranging from value distribution through to value creation.

Clearly, shared value is at the value creation end of this continuum, focused on finding those opportunities where 1+1=3; identifying value propositions that can align corporate, stakeholder, community, environment and other interests -- creating new value by making the pie larger. At the other end of the continuum are value distribution actions. These too are important. They are where companies share or distribute value in a voluntary and strategic manner so that communities, stakeholders, environment and other interests receive new value, and some level of value is created for the company through goodwill, reputational capital, social license enhancement, etc. Notice that at both ends of the continuum the actions produce value for the company, that there is some alignment of shareholder and stakeholder interest. If there wasn’t, why on earth would the company do them?

The mistake that people sometimes make is to assume that those CSR projects and initiatives that are at or closer to the value creation end are necessarily more important, that companies should do more of these and less of other projects. The full range of CSR actions -- grants, donations, scholarships, education, training, community development, environmental restoration, local institutional development, local infrastructure, employment and skills development, local procurement and business development -- are all important tools.They can be important for the company and for local stakeholders.

Depending on the specifics of each one, they will situate differently on the continuum. But in general something like grants, donations and scholarships would fit more towards the value distribution end of the continuum, while local procurement and business development would tend to be closer to the value creation end. The value continuum is useful in revealing to companies how their actions fall on a distributive-to-creative scale, and this understanding can help both strategically and tactically to optimize value return from CSR investments.

Companies and projects stand to maximize benefit by consciously thinking of their CSR projects and activities in terms of the value continuum and have a spectrum of activities that span the continuum. This benefit includes discovering new strategies and opportunities for creating and capturing more value from existing activities -- opportunities which risk being overlooked if focussing only on one end of the spectrum.

CSR is a complex and evolving field. There are some great projects and great innovations happening, and value is being created in exciting and innovative ways. I’ve found that practical tools and frameworks like the value continuum can help companies and practitioners to enhance their understanding of the value aspects of their CSR activities and to be more efficient at creating and distributing value.

Wayne Dunn is a Professor of Practice in CSR at McGill University in Canada (he calls himself an accidental academic). He has over two decades of practical experience in CSR at all levels and all over the world. His work has been used for a Stanford Case Study and has won many awards including the first ever private sector project to win a World Bank Development Innovation Award. He is currently the Executive Director of the CSR Training Institute and is developing and delivering Executive Programs around the world. He is a Stanford Business School Sloan Fellow and lives on Vancouver Island in Canada. He can be reached at [email protected].

The introduction of a ‘greener’ petrol to meet EU regulations could increase harmful CO2 tailpipe emissions, says What Car? .

The move to introduce E10 fuel, which is expected to happen this year, has been branded as “irresponsible” by the consumer car buying guide after it undertook the first ever real-world tests on the new blend of petrol. Until now, the fuel had only been tested in laboratory conditions.

The E10 fuel contains 10% bio-ethanol and is being rolled out across the UK as part of the Government’s commitment to reducing greenhouse gas emissions and conforming to the EU’s Renewable Energy Directive. This requires 10% of road transport energy to be from renewable sources by 2020.

However, What Car?’s  testers discovered that E10 is less efficient than the current E5 (up to 5% bio-ethanol) blend of fuel across every engine type tested. This means cars have to use more of the new fuel, costing drivers much more each year.

Editor-in-chief Chas Hallett is calling for the Government to carry out comprehensive, UK-focused testing in order to better understand the financial impact of the new petrol.

“The US Environmental Protection Agency estimates that the detrimental effect of E10 on fuel economy is between three and four percent, but even our small sample of tests proves otherwise,” he said.

“To lead consumers into E10 without fully communicating the significant impact on fuel economy, particularly for drivers least able to absorb the extra costs, is irresponsible.”

What Car? tested E10 against E0 ‘pure’ petrol so it could directly compare its results with the US EPA’s. The cars used were a three-cylinder turbo (Dacia Sandero), a naturally aspirated car (Hyundai i30), a hybrid (Toyota Prius+) and a four-cylinder turbo (Mini Paceman).

It’s not just economy that is harmed by the use of E10, says the magazine. CO2 tailpipe emissions also increased in every vehicle tested by What Car?, although the Low Carbon Vehicle Partnership asserts that these increases would be partially offset by the renewable properties of bio-ethanol and the fact that the crops used to produce it absorb CO2 while growing.

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Submitted by Guest Contributor

By Koen Boone, Managing Director, Europe, The Sustainability Consortium

The Ecolabel Index includes 444 different sustainability labels. Thousands of other initiatives exist around the globe across levels and purposes. Can we use their combined power to create a more sustainable world? And how?

International and National Initiatives

The most overarching initiatives are probably the well-known Millennium Development Goals (MDG) and Sustainability Development Goals (SDG). Both set the sustainability goals on a global level.

While the MDG were set nearly 15 years ago and focus on social issues, the SDG are a follow up of the Rio+20 meeting and focus on environmental issues. Both sets could potentially merge into one set of indicators on the global level.

Many similar initiatives also exist at the national level. One group of indicators that have become popular over recent years are the OECD Green Growth Indicators, designed to support policy makers in combining economic growth and sustainability.

Another example on the national level is the United Nation’s Human Development Index that can be calculated for 187 countries. Some countries like the Netherlands even produce a sustainability report that not only includes sustainability performance but also links it with policy-making.

Regional and Project-Level Initiatives

Numerous indicator sets are available on the regional level as well for provinces/states, cities, neighborhoods, etc. Some of these are going into the direction of an integral policy evaluation instrument, recognizing that all policy-making has a relationship to sustainability and should be analyzed in an integral way. This development is comparable to the move from sustainability reporting to integrated reporting by companies.

However, sustainability measurement on a wide scale was first introduced at the project level. By the 1980s, methodologies such as (Social) Cost Benefit Analysis (CBA) were introduced for large infrastructural projects and soon became obligatory in several countries around the world.

Company and Product Level Initiatives

Despite the origins, most initiatives – hundreds in the last 15 years – remain at the company and product levels.

On the company level, tools may support the internal management of sustainability within a company (all large consultancies have their own tools), are targeted for sustainability reporting (like the Global Reporting Initiative or SASB) or for selection of sustainable companies by investors (Dow Jones Sustainability Index).

On the product level, measurement may be targeted to consumers (organic, fair trade, GoodGuide, Product Environmental Footprint) or for Business-to-Business communication (The Sustainability Consortium).

A smaller number of initiatives also exist on other levels like the industry level (for sustainability reporting on industry level by trade or producer organizations or for comparing industries by statistical institutes) and consumer level (Global Footprint Network).

Needed: Better Alignment Between Scale Levels

While people have argued for a decrease in the number of initiatives and for more harmonization for a while now, I would like to argue instead for more alignment between these levels. The MDGs and SDGs, for example, would have much more impact if translated to the levels with strong decision power and in actionable language.

While final success can only be measured on a global scale, recent history (UNFCCC/Kyoto, WTO) has proved that decision power is very limited on this scale. Ideally, indicators on the global level should be translated into specific improvement opportunities of decision makers on all levels.

Another reason to align these different levels is so that the initiatives can learn from each other. In most cases, those implementing initiatives on the same level know of each other, meet often and profit from new insights and developments. But they hardly know anything or anybody from other levels, although nearly all the methodological issues are the same across these levels.

Bringing people together from different levels can lead to real improvements and innovations in sustainability measurement as seen by the Societal Cost Benefit Analysis, for example, which has been applied to infrastructural projects for decades but has only become popular in the business community recently (TEEB, PUMA environmental profit and loss account).

The Sustainability Consortium

This is where The Sustainability Consortium's (TSC) efforts to develop methods to measure sustainability on product levels together with its members (universities, governments, NGOs and companies) are useful.

Using a combination of product category and product level analysis, TSC identifies hotspots (sustainability bottle necks) based on quantitative scientific analysis (like Life Cycle Assessment). To measure the performance of an individual product within that product category, a combination of outcome based (e.g., kg CO₂ emissions) and input/process oriented indicators (e.g., using renewable energy) are used.

The use of input/process oriented indicators not only has the advantage of making a direct connection with improvement opportunities for the companies involved but also improves the scalability and the answerability of indicators by all companies around the world. We also stimulate alignment by participating in stakeholder consultations for the SDG setting, for example, and working to make the connection between SDG and initiatives across levels.

But like previous attempts, TSC cannot work in a vacuum. Alignment and cross scaling will require a collaborative effort. And that's where we need your support.

Related: The Leaky Faucet: Using Supply Networks to Prioritize Product Sustainability Decisions

About the Author:

Dr. Koen Boone is Managing Director Europe of The Sustainability Consortium (TSC) and works at LEI part of Wageningen University and Research Centre. Koen has nearly 15 years of experience on measuring sustainability on all kinds of levels (product, company, sector). He worked together with the Global Reporting Initiative (GRI) on the development of GRI guidelines for sustainability reporting for the Food Processing Industry.

About The Sustainability Consortium:

The Sustainability Consortium (TSC) is an organization of diverse global participants that work collaboratively to build a scientific foundation that drives innovation to improve consumer product sustainability. TSC develops transparent methodologies, tools, and strategies to drive a new generation of products and supply networks that address environmental, social and economic imperatives.

The Sustainability Consortium advocates for a credible, scalable and transparent process and system. The organization boasts over 90 members from all corners of business employing over 8.5 million people and whose combined revenues total over $2.4 trillion. The Sustainability Consortium is jointly administered by Arizona State University and University of Arkansas with additional operations at Wageningen University in The Netherlands and Nanjing University in China. Learn more at www.sustainabilityconsortium.org.

The North American cold wave has wreaked havoc on energy systems this winter, plagued by natural gas shortages, rising peak power demand and power plants going offline due to extreme weather conditions. The displaced polar vortex, with its frigid temperatures and strong winds, has caused energy use to soar--creating supply shortages and rising energy costs. But wind power has performed well overall.

Natural Gas Shortages

Natural gas shortages are emerging across the country, brought on by unusually high natural gas use due to record cold temperatures, as many households use natural gas furnaces and boilers. The situation is compounded by freezing gas wells, slowed production and other infrastructure complications due to low temperatures and high winds. Natural gas inventories fell by 262 billion cubic feet two weeks ago, causing prices to rise. Stocks of natural gas are low, and winter is only half over.

"We're seeing very high prices because of freeze-offs and storage concerns. Utilities are concerned because it's been so cold that they are buying spot gas to make sure they have enough in storage to get through the withdrawal season," said Aaron Calder, market analyst with Gelber & Associates.

Peak Power Demand

Shortages are causing natural gas prices to rise, reaching a four-year high earlier this month but coming down slightly since. Electricity generators are asking customers to conserve power, which would require fewer natural gas power plants to come online. To compound the situation, California has been depending more on natural gas to generate electricity since the decommissioning of San Onofre Nuclear Generating Station. Unfortunately, cold temperatures this winter have also caused electricity use to climb due to high heating demand.

Some utilities have set records for peak winter power demand. Such high winter demand is relatively rare, with summer demand spikes being far more common. Some utility companies, such as Nebraska Public Power District (NPPD), are choosing not to use gas-fired plants, because prices are 300 percent higher than power from other sources.

Extreme Winter Weather Causes Equipment Failure

Dozens of power plants have failed during cold snaps this year, caused by a variety of weather-induced complications. "We lost about 3,700 megawatts of generation," said Dan Woodfin, director of system operations for the Electric Reliability Council of Texas. "About half of that was weather-related and the remainder were due to non-weather-related issues." Monitoring equipment failed at two power plants, requiring them to shut down, according to Woodfin.

Wind Power Eases Woes

“NPPD was able to meet this highest level of demand, in part, due to our steady and stable supply of power generated by our nuclear and coal-fired facilities,” said Pat Pope, president and CEO of NPPD. “But the wind also worked in our favor yesterday, contributing more than 216 megawatts for NPPD during the time of peak demand.”

Wind power is often criticized for producing far more energy in the winter, when energy demand is more moderate and tapering off when demand spikes in the mid-summer. Renewable energy advocates often point out that solar energy output increases in the summertime, allowing the two sources to work well in tandem.

Wind energy, however, is uniquely capable of handling high winter energy demand, which has been particularly important this year. The cold weather has allowed wind energy to fill supply gaps in regions with large wind energy capacity, as the cold temperatures have been accompanied by high wind speeds.

During times of peak demand in late January, wind energy was saving $1.5 to $2 million per hour as it supplied 3,500 MW of electricity to PJM (the power grid agency for 13 Mid-Atlantic and Midwestern states), according to the American Wind Energy Association. This strong supply of electricity during peak demand also helps ease power costs overall, resulting in greater cost savings to consumers.

The same phenomenon has been true this winter in Ireland, where wind power has been reducing reliance on natural gas. "The substantial contribution of wind energy helped reduce the monthly average wholesale electricity price by 5 percent," says John Heffernan, gas and power trader of Bord Gais Energy, a leading energy provider in Ireland.

As wind technology advances, wind turbines will perform even better in harsh weather conditions. Icing can be an issue on wind turbines in the winter, reducing energy output and even requiring machines to be shut down. Deicing technology is advancing, helping to make winter wind energy production more reliable.

The extreme weather this winter demonstrates that all types of power generation can fail, or in the case of natural gas, become far more expensive. Ultimately, a diverse energy mix boosts resiliency, especially as climate change causes severe weather. Higher energy costs also make the renewable energy systems installed by corporations such as Google and SC Johnson more appealing to mitigate the effects of fluctuating energy costs.

Image credit: Flickr/niXerKG

Chart courtesy of Ontario IESO

Sarah Lozanova is a regular contributor to environmental and energy publications and websites, including Mother Earth Living, Energy International Quarterly, Triple Pundit, Urban Farm, and Solar Today. Her experience includes work with small-scale solar energy installations and utility-scale wind farms. She earned an MBA in sustainable management from the Presidio Graduate School and she resides in Belfast Cohousing & Ecovillage in Midcoast Maine with her husband and two children.

Last week one of the largest fast food companies decided to remove a chemical from its food after a public outcry on social media led by an influential blogger. Now, you might have heard similar stories before, but what makes this one even more interesting is the identity of the company.

This time it is none other than Subway, the restaurant chain that prides itself on providing a healthier and better alternative fast food.

The story begins last Tuesday, when Vani Hari, who runs the blog FoodBabe.com, launched a petition for the removal of a chemical called Azodicarbonamide from Subway sandwich bread.

Azodicarbonamide, Hari explained,  is used in yoga mats, shoe rubber and synthetic leather, the World Health Organization has linked it to respiratory issues, allergies and asthma, and it is banned as a food additive in Europe and Australia. However Subway, she added, uses it in the U.S. as a bleaching agent and dough conditioner in order to produce bread faster and cheaper.

Hari said she tried in the past to receive answers from Subway about the use of Azodicarbonamide, but never heard back from the company. This time the company couldn’t ignore her -- within 24 hours the petition received more than 50,000 signatures (more than 80,000 by the end of the week), and “Subway’s social media channels were completely overrun by concerned citizens and the Food Babe Army,” according to Hari.

The company’s reply came eventually and was somewhat surprising. "We are already in the process of removing Azodiacarbonamide as part of our bread improvement efforts despite the fact that it is USDA- and FDA-approved ingredient," the company said in a statement. "The complete conversion to have this product out of the bread will be done soon."

I’ll get back later to Subway’s choice to ignore the petition in its statement. First, let’s look at the facts included in the statements. The FDA indeed allows the use of Azodicarbonamide in very small amounts (0.0045 percent or 45 parts-per-million by weight of the flour used) as a dough conditioner in bread baking.

So far, so good. However, this is not just a matter of compliance with the law, as we can learn from the fact that Subway decided to stop using Azodicarbonamide even though it’s perfectly legal to do so in the U.S. If it was only about compliance, then why would Subway stop using it? More likely, then, this is a matter of corporate responsibility.

When it comes to corporate responsibility, the name of the game in the case of Subway is health. The company positioned itself as a provider of healthier and fresh fast food choices, supported by reports like the one conducted last year by the Center for Science in the Public Interest (CSPI) on kids’ meals, where Subway was the only chain that met CSPI’s nutritional criteria.

This year the company decided to take a step further and teamed up with first lady Michelle Obama’s Healthy Eating Initiative, pledging to take a couple of significant steps, including only offering items on its kids' menus that meet the new federal nutritional standards for school lunches and spending $41 million in the next three years on marketing healthier options to children.

On the day of the announcement, the first lady visited a Subway sandwich shop a few blocks from the White House, and had lunch and a news conference there with famous athletes (Michael Phelps, Nastia Liukin and Justin Tuck) and kids from a nearby elementary school. The Washington Post reported that the first lady ate a turkey sandwich on wheat stacked with banana peppers, green peppers and spinach, most likely without knowing that, if it this was a nine-grain wheat bread, her sandwich probably included Azodicarbonamide.

My guess is that if the first lady was familiar with controversy around this issue, she may have reconsidered some quotes in her press release, including “Subway's kids' menu makes life easier for parents, because they know that no matter what their kids order, it’s going to be a healthy choice.”

Yet, an even more important quote in the press release is one made by Suzanne Greco, VP of R&D and Operations at Subway: “... We hold ourselves to the highest standards in the industry when it comes to speaking to children and their families. Now we are letting everyone else know what that standard is.”

It’s quite obvious that you can’t claim to hold yourself to the highest standards, get involved in a national campaign with the first lady and not walk the talk. I believe that after Hari’s petition went viral Subway finally understood that they can’t continue to claim using Azodicarbonamide goes hand-in-hand with having the highest standards in the industry.

While Subway should be credited for doing the right thing, we can’t avoid the question of whether or not customers can truly trust the company and its commitment to provide “better choices for families.” I’d like to think that it can, because the company seems to be truly interested in positioning itself as the healthier choice for families.

At the same time, the fact that in its statement Subway totally ignores the public outcry and made no effort whatsoever to engage with the blogger who led this campaign (Hari) is a bit worrisome, as it bring into question the company’s willingness to engage with stakeholders, its openness to criticism and its commitment to transparency.

Without raising the bar on these components it would be very difficult for Subway to regain the trust of many of its customers and be framed again as everything that McDonald’s isn’t.

Will you trust Subway? If not, what does the company need to do to regain your trust?

Image credit: freddy, Flickr Creative Commons

Raz Godelnik is an Assistant Professor of Strategic Design and Management at Parsons The New School of Design. You can follow Raz on Twitter.

Women delivered a strong and very frank message to the business community at the Feb. 6, 2014, EPA hearing on carbon pollution standards tied to electric utility generation. Their message was that protecting the health of their loved ones is an absolute. And they see coal-fired power plants as a health threat to themselves and their families. Reinforcing their testimony was the more than 3 million messages the EPA received on the issue of carbon pollution standards.

Listen or face the business consequences

I recommend every businessperson seeking to win or keep women as customers reflect upon the following tweets shared by Moms Clean Air Force from this EPA hearing:

• "Clean air keeps our children in schools, and people on the job...increasing productivity."


• "Clean air is vital to healthy women and healthy babies."


• "A fossil fuel based economy is a bad business decision."


• "We're not buying the argument that strong, bold carbon regulations are going to hinder the economy"

This next tweet is one that should keep business leaders up at night if they source electricity from coal-fired power plants that represent the leading source of mercury pollution: “Who bears the costs of pregnant women w/ mercury in their bodies?" On a human level, what business or business leader wants to have this type of impact upon a mom and her baby? On a business level, what could the damage be to sales and profits if women hold this viewpoint toward a business based upon its purchase of electricity sourced from coal-fired power plants?

Corporate America has lost the trust of moms

"The American people can't trust polluters to police themselves." This tweet is the gauntlet being thrown down by women toward American businesses. Ford Motor Company's market research published in 2013 found consumers now trust only one out of every four brands. A .250 batting average is underperforming even in baseball. It is an absolute profit-threat confronting corporations at their cash registers.

Coal-fired power plants and pink slime

Pink slime is a business case study that highlights the ramifications when a business violates customer trust. At one time pink slime was accepted as a low-cost, lean, finely textured beef. But then this product lost the consumer’s trust, most especially with moms. The impact on companies that had products containing pink slime was an absolute shutdown of sales.

The testimony submitted by moms at the EPA hearing on carbon standards for coal-fired power plants raises the question of whether these plants could become the next pink slime threat to business revenues? If your business is located in the Midwest or South, where up to 50 percent or more of electricity generation is sourced from coal, then the idea that customers will not buy from your business because it uses coal-based electricity probably seems absurd. The only caution is: So did the idea that moms would turn against low-cost, lean, finely textured beef.

Retailers get it!

Retail is the business segment that may be the closest to the customer. Is it a coincident that retailers are the leading installers of rooftop solar systems and the shift away from fossil-fueled electricity generation? Are you aware that Walmart, the nation’s largest retailer, is aggressively working to fulfill its commitment to source 100 percent of its electricity from renewable energy?

Yes, retailer adoption of rooftop solar does reflect the dramatic drop in cost that has made solar power a good investment compared to buying grid-supplied electricity sourced from fossil fuels. But the other driving factor is that retailers are astutely attuned to their female customers. Their experiences, shaped by products like hazardous Chinese-manufactured toys and pink slime, have made them acutely aware of the business ramifications tied to failing to protect the loved ones of women. This consumer perspective, plus a demonstrated commitment to move away from coal-fired power plants, is something every business should not lose sight of.

Women have the answer on who pays for pollution

Women control 80 percent of household budgets. Daily, they struggle between balancing their budgets and buying goods and services that are protective of their loved ones. From this prospective, the following sentence submitted at the EPA hearings will be obvious to most women: "The price of carbon pollution must be paid by the polluter...not the people." Share that sentence with your company’s CFO the next time they object to an investment in energy efficiency or renewable energy because they view the financial payback to be too long or the return on equity to be too low. Ask them to reevaluate their spreadsheet by assuming that someday there will be a carbon pollution tax because of a campaign driven by women to tax polluters rather than people. In fact, today a broad range of companies, such as Google and ExxonMobile, now include a carbon tax estimate in their financial calculations on investment alternatives and budget choices.

Grow sales by meeting the expectations of 'Concerned Caregivers'

Aligning values with values is a proven best practice for increasing sales with Concerned Caregivers (moms and dads focused on the wellness of their loved ones). The price sticker is the foundation of this strategy because 90 percent of customers have not seen actual wage increases over the last 15 years. In today’s economy, a product must have a price that the consumer views as competitive.

Aligning value with values creates a path to being price-competitive, selling products with sustainable profit margins. Aligning with customer values is now cost-effective, as sustainable solutions gain economies of scale that are driving down their implementation costs. Or, as Jeff Rice of Walmart captures it, “Sustainability absolutely supports everyday low prices.”

And most fundamentally, sustainability will also grow sales with moms by winning their trust. What was presented by moms at the Feb. 6, EPA hearings on carbon standards for power plants was a growing awareness that companies using electricity sourced from coal-fired power plants are not to be trusted. Considering that women represent $8 trillion in annual U.S. buying power, this shift in their trust criteria holds the potential of being a “pink slime” challenge that should not be discounted by any business or business leader.

This article is dedicated to Jen Boynton, Editor of Triple Pundit, who is expecting her first child next month.

Bill Roth is an economist and the Founder of Earth 2017. He coaches business owners and leaders on proven best practices in pricing, marketing and operations that make money and create a positive difference. His book, The Secret Green Sauce, profiles business case studies of pioneering best practices that are proven to win customers and grow product revenues. Follow him on Twitter: @earth2017

Did the International Olympic Committee (IOC) violate the UN Guiding Principles on Business and Human Rights (UNGPs) by allowing Russia to host the 2014 Winter Olympics?  I think it did.

Unless one has been living under a rock during the entire Putin reign, one probably knows – or, at least, can (rightly) assume – the following things about the current Russian government:  it is anti-gay; it is totalitarian; it treats the environment like a toilet and environmental activists like, well, excrement; and it is in the midst of a protracted war against an ethnic minority, one that makes its home not too far from the home of the 2014 Winter Olympics in Sochi.

The International Olympic Committee’s decision to host the 2014 Winter Games in Sochi has shone a brighter light on some of these issues, particularly Russia’s antipathy towards the LGBT community, and that increased scrutiny is a good thing for human rights.  Perhaps the pressure of being under the international community’s microscope will force policy change.  It seems unlikely and entirely antithetical to the Putin administration’s core operating principles, but who knows.  It’s not like Russia is a stranger to media coverage of its abysmal human rights record, but maybe the games and the attendant scrutiny will force the government’s hand. Or perhaps not.

One issue that seems to be receiving scant attention in the media, though, surrounds the IOC’s decision to host the games in Russia in the first place.  Maybe this debate played out in the public sphere back when the decision was announced in 2007, or maybe nobody really cares since the point is now moot and so much attention is focused on the prospect of a terrorist strike in Sochi.  But I think the IOC’s decision, and its obligations under international law after making such a decision, bears (renewed?) consideration here.

First, a brief primer on the current state of international law as it relates to the human rights obligations of businesses:

According to the UNGPs, in order to act in compliance with international law, a business enterprise must "avoid infringing on the human rights of others"  (UNGP 11). This obligation extends not only to infringements "caus[ed] or contribut[ed] to . . . through [the enterprise’s] own activities," but also to "adverse human rights impacts that are directly linked to [the enterprise’s] operations, products or services by [the enterprise’s] business relationships, even if [the enterprise] ha[s] not contributed to those impacts"  (UNGP 13; my emphasis). In other words, while an enterprise is clearly in violation of the UNGPs if the enterprise itself directly causes an adverse human rights impact, the enterprise may also be in violation if one of its business partners or entities in its supply chain, without any knowledge or assistance of the enterprise itself, causes an adverse human rights impact.

The UN’s Office of the High Commissioner of Human Rights’ (OHCHR) commentary on the UNGPs helps clarify the situation.  According to the OHCHR, an enterprise can be involved in an adverse impact on human rights in one of the following three ways:

1. It caused the impact through its own activities;


2. It contributed to the impact through its own activities—either directly indirectly;


3. Though it may have neither caused nor contributed to the impact, it "may be involved because the impact is caused by an entity with which it has a business relationship and is linked to its own operations, products or services."

Now, back to the games. There haven’t, to my knowledge, been any allegations against the IOC for violating human rights directly, and it doesn’t appear that the IOC is "contributing" to adverse human rights impacts in any way. But what about that third category, which covers violations "caused by an entity with which [the IOC] has a business relationship?"

Let’s imagine the IOC as a traditional product-making corporation based in Switzerland. In this case, instead of a smartphone or a laptop manufactured somewhere in Asia and sold everywhere around the world, the IOC’s product is the Olympics and, in this cycle, it is being "manufactured" in Russia (and also sold all over the world).  The host country is responsible not only for literally hosting the games and all the athletes and country delegations, but also for constructing the relevant facilities, hiring workers to build and work in those facilities, and so on.  Russia, then, would appear to be a material link in the IOC's supply chain.  In fact, the relationship is not so different from Apple's association with Foxconn in China or Walmart’s connection to workers in Bangladesh.

So the IOC could be on the hook for human rights violations perpetrated by the Russian state, but to what extent?  The OHCHR’s examples for this type of tertiary “liability” are illustrative:

1. Providing loans to an enterprise for activities that, in breach of agreed standards, result in forced evictions;


2. Embroidery on a company’s clothing products that are subcontracted to child laborers, counter to the parties’ contractual obligations;


3. "Use of scans by medical institutions to screen for female fetuses, facilitating their abortion in favor of boys." In each case, the enterprise is in trouble because its product is being used in or in furtherance of a violation by a third party, without the enterprise’s knowledge.

When I first started thinking about this question, I wondered whether the IOC was in violation of international law simply by choosing Russia as host. Yet, the foregoing makes clear, at least to me, that this conclusion is not supported by the UNGPs. After all, if it were really the case that the IOC was on the hook simply for letting Russia host the Games, no businesses could operate in any countries whose governments abuse human rights. Not a bad outcome if you ask me, but not the type of outcome likely to be supported by business (which the UNGPs were).

It’s also clear, however, that the IOC could be in trouble to the extent that Russia’s Olympic-related activities have had adverse human rights impacts.  Recall the above: a violation occurs where harm is caused by an entity with which the enterprise has a business relationship, and the harm is linked to the enterprise’s operations, products or services. Here, Russia is the business with which the IOC has a relationship and the link is that the harm is in furtherance of Russia’s duties as host of the Olympics.

So, what’s the verdict?

It should probably come as no surprise that there have been extensive reports that Russia’s Olympic-related activities have had adverse impacts on the human rights of the Russian people and those working to support Russia’s duties.  For instance:

• Sochi families have been forcibly evicted and their houses demolished to make room for Olympic facilities;


• Migrant workers are being exploited;


• Workers are not being paid;


• Waste from Olympic-related construction is being dumped irresponsibly and may be contaminating the water supply.

Under the UNGPs, the IOC had a duty to ensure that these things did not happen.  It failed, and in doing so, appears to have violated its obligations under international law.

Check out HRW’s long list of Russia-related human rights resources here.  The Business & Human Rights Resource Center also has extensive Sochi coverage.

Image credit: Olympic Organizing Committee

By Mark Camilleri, PhD

Companies deal with different stakeholders’ opinions, attitudes and perceptions about their behavior. Often they need to strike a balance in satisfying numerous stakeholders’ expectations.

Of course, businesses can’t please everyone. Yet, they should try to engage in fruitful and collaborative working relationships with their external stakeholders, as dialogue often leads to improvements in mutual trust and understanding. Continuous communication also translates into benefits for a company's reputation, brand image, customer loyalty and investor confidence.

Companies cannot afford to overstate or misrepresent their corporate social responsibility (CSR) initiatives. Although they often manage to control their internal communication paths, it is much harder to control external media. As a result, it has never been more necessary to turn stakeholders into potential advocates for both the cause and the company. This can happen if CSR initiatives are a good fit for the company's mission and vision. It is advisable that CSR communications reflect the ethos of the practicing organizations. Therefore, the intentions of CSR (and sustainability) reporting should be clear, with specific and relevant information featuring the company’s credentials -- and how stakeholders can benefit.

Leveraging CSR for increased stakeholder value

CSR behavior is directed at the organization’s stakeholders comprising human resources, suppliers, customers and the community at large. Well laid down policies and initiatives are usually communicated through formal statements in annual reports, as well as through corporate websites. CSR reporting covers areas like training and development opportunities for employees, employee consultation and dialogue, health, safety and security issues, and also measures for work-life balance.

Apparently, business organizations are increasingly pledging their commitment for more innovative environmental investments. For instance, energy and water conservation, waste minimization and recycling, pollution prevention, environmental protection as well as sustainable transport options. These sustainable practices bring strategic benefits such as operational efficiencies and cost savings. Several empirical studies (including mine) have indicated that discretionary investments in CSR, whether they are driven from strategic intents or from "posturing behaviors," often result in improved relationships with internal and external stakeholders. The rationale for societal engagement is to anticipate third-party pressures, lower the criticisms from the public and minimize legal cases through compliance with regulations.

CSR should not be merely presented as goodwill or as a philanthropic venture. It should be featured as a realistic business case for stakeholders. This shared value proposition requires particular areas of focus within the company’s context. Yet, at the same time, it looks after the societal well-being. This notion contributes towards sustainability by addressing societal and community deficits. Presumably, shared value can be sustained only if there is a true commitment to organizational learning, and if there is a genuine willingness to forge relationships with key stakeholders, including customers and employees. Free publicity and informal word-of-mouth can either bring supportive or damaging effects. Moreover, there is scope for businesses to foster strong relationships with particular community and marketplace beneficiaries. Such stakeholders can possibly serve as a buffer against potentially negative and harmful reviews.

Content marketing and CSR: Driving the point home

Recently, companies are increasingly focusing their attention on content and inbound marketing. In a nutshell, content marketing necessitates an integrated marketing approach through different channels of communication with stakeholders. This has to be carried out at all times. Many local businesses are becoming proficient in their customer engagement. They realize that this marketing approach brings customer loyalty, particularly if the business is delivering consistent, ongoing business propositions.

In a similar vein, inbound marketing tactics also draw customers to businesses. Successful businesses are continuously coming up with informative yet interesting, original content through innovative marketing and interactive methods such as blogs, podcasts, social media networking and e-newsletters. Online content includes refreshing information which tells stakeholders how to connect the dots. It goes without saying that corporate internet sites are serving their purpose. The general public is continuously presented with a better picture of a company's communications -- containing the latest news, elements of the marketing-mix endeavors and marketing fads. It transpires that content marketing has become a valuable tool for CSR communications.

Businesses who make use of the right content to explain their CSR behaviors will gain a competitive advantage relative to others. On the other hand, stakeholders have become acquainted with businesses communicating their motives and rationale behind CSR programs. CSR practices provide a good opportunity for businesses to raise their profile through their laudable behaviors. At times, businesses can obtain decent coverage by third parties, especially media enterprises who are renowned for their sense of objectivity. Strategic communications help to improve the corporate image of firms, leading to reputation benefits and rapports of trust with stakeholders. This short contribution suggests that content and inbound marketing can be successfully employed for CSR communications and to enhance customer and employee engagement.

Image credit: Flickr/Ericsson Images

By Dr. Nicoletta Piccolrovazzi, Technology and Sustainability Director, Dow Olympic Operations Team

With the Sochi Olympic Winter Games upon us, athletes and fans around the world are now captivated with one of the world’s greatest sporting events. Nations have proudly united under their national banners, with a good spirit of global competition and sportsmanship running high.

However, much of what has garnered the media’s attention so far for these games has left the global audience wondering about what will be the true impact of the Sochi 2014 Olympic Winter Games.

While these issues will no doubt continue to be debated throughout and after the games as we reflect on Sochi, there is naturally a number of positives to examine with regards to any Olympics, such as the glory of global athletes, and even added excitement from local businesses and communities seeing a massive influx of spectators and media that is sure to spark commerce and leave a taste of the host country scattered across the world. And although this heightened activity can also be associated with an emissions burden from the organization and staging of such a massive event, an innovative partnership has been formulated to ensure that this facet of the games brings yet another positive to the legacy of the Olympics at large.

Protecting the environment is a priority of the International Olympic Committee (IOC). In 1996, the IOC formally recognized its importance to hosting the games, naming the environment the third dimension of "Olympism," joining sport and culture. This created an opportunity for more positive action around the games and a chance to address a new challenge and drive tangible results.

As the official chemistry company of the Olympic Games since 2010, Dow evaluated the needs of the Olympic Movement and the role we could play in helping to make the games better by our participation. On this broader commitment to the Olympics, we stepped up to partner with Sochi 2014 to transform the aspiration to deliver "games with minimal impact to climate" into tangible carbon mitigation results.

As the official carbon partner of the Sochi 2014 Organizing Committee, we at Dow strategized on how we could address a tangible and meaningful target related to the sustainability of the games, which led to the creation of a truly groundbreaking initiative -- the Sustainable Future program. This unique program is designed to mitigate the direct carbon emissions of the games and also to introduce more sustainable business practices in key industries for Russia.

Now, we are proud to say that we have helped the Sochi 2014 Olympic Winter Games become the first Olympic Games in history to mitigate the entire direct carbon footprint of its Organizing Committee prior to the opening ceremony. As of today, we have delivered emissions reductions amounting to more than 500,000 tons of CO2 equivalents – as verified by international experts ERM.

Our partnership with the International Olympic Committee, along with an innovative technology program and approach, is what made this incredible feat possible.

The underlying guiding principles for this approach have been set out in the Climate Solutions Framework developed in partnership with international experts at Offsetters. Dow’s framework was launched at the United Nations’ COP 19/CMP 9 event in Warsaw, Poland, in November 2013, with broad recognition from private and public sector players from around the world.

Our program is focused on integrating more sustainable practices in three key markets in Russia: agriculture, construction and infrastructure. Our solutions range from training local farmers in more sustainable farming practices and introducing seeds to produce healthier oils, to weatherizing Russian homes to increase energy efficiency, and finally to improving the integrity of existing structures and new ones, such as bridges and roads, with the application of carbon fiber composites.

And, in addition to these innovative projects, we have purchased voluntary carbon credits to completely offset spectator and media travel associated with the games – a first in Olympics history.

And now through our program and accomplishments at the Sochi Games, we hope to provide a model in which the public and private sector can collaborate to address the environmental impact of all large-scale events, not just the Olympics. That’s the vision in which we designed our framework -- a model that is not only spearheaded by Dow, but one that can be adapted by a variety of organizations and institutions.

But when the games end on Feb. 23, our impact will carry on. While our immediate focus is on mitigating the games’ direct carbon footprint, our long-term goal is to position Russia for greater environmental prosperity with the opportunity to build both low-carbon and economically sound development.

Our agriculture programs will help promote more sustainable farming practices in Russia. Our construction programs will improve the energy efficiency performance of homes across the country. Our infrastructure program will have implications on the future emissions landscape as these public structures will require less maintenance moving forward. And we’re also promoting awareness of ways in which Russia’s citizens can reduce their environmental footprint every day.

So, while most will measure the margin of success at the Olympics on the number of medals won by athletes and their countries, we’ll be measuring our success in climate benefits -- and seeing Sochi 2014 as a bright spot on the podium.

Image courtesy of International Olympic Committee

British retail giant Primark is the latest global clothing company to commit to eliminate hazardous chemicals from its clothing supply chain.

In a statement on its website it says: "We believe that business has a duty to act and trade responsibly. We have a stringent chemical management policy in place which complies fully with EU legislation. This policy is supported by a programme of due diligence and scrutiny to ensure our products comply at all times with these legal requirements.

"However, Primark has long recognised the importance of continuing to reduce the environmental impact of manufacturing processes, and has today announced its commitment to work with industry and stakeholders including Greenpeace to ban the use of all hazardous chemicals from the supply chain."

The move follows luxury fashion label Burberry's recent announcement  to eliminate the use of hazardous chemicals from its supply chain by 2020 following a 'Detox' campaign spearheaded by Greenpeace.

The NGO expressed delight at Primark's announcement saying the news was 'fantastic'. However it cautioned: "It’s time for them to walk the talk. Detox leaders like Mango, H&M and Fast Retailing are showing how it’s done and setting the toxic-free trend. Unfortunately, some like adidas and Nike are stuck on the first step, while others like Disney haven’t even got off the starting block."