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USA TODAY Collegiate Case Study: Corporate Social Responsibility

USA TODAY Collegiate Case Study: Corporate Social Responsibility

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Corporate Social Responsibility (CSR) is a concept whereby corporations (or other for-profit organizations) consider the interests of the societies within which they are based and operate. Moving beyond philanthropy and compliance,
CSR addresses how companies manage the impact of their economic, social, and environmental policies, as well as their relationships with customers, employees, suppliers, shareholders, and communities. CSR has become a multi-billion dollar public relations specialty in the business world, yet there are those who argue that the positive impact of CSR on
businesses is overblown and say companies exist to sell products, make money and please shareholders — not to save the world.
Corporate Social Responsibility (CSR) is a concept whereby corporations (or other for-profit organizations) consider the interests of the societies within which they are based and operate. Moving beyond philanthropy and compliance,
CSR addresses how companies manage the impact of their economic, social, and environmental policies, as well as their relationships with customers, employees, suppliers, shareholders, and communities. CSR has become a multi-billion dollar public relations specialty in the business world, yet there are those who argue that the positive impact of CSR on
businesses is overblown and say companies exist to sell products, make money and please shareholders — not to save the world.

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Published by: USA TODAY Education on Mar 25, 2010
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Collegiate Case Study
Boardrooms open up to investors’ input
By Edward Iwata ....................................................................4-7


Corporate Social Responsibility
Corporate Social Responsibility (CSR) is a concept whereby corporations (or other for-profit organizations) consider the interests of the societies within which they are based and operate. Moving beyond philanthropy and compliance, CSR addresses how companies manage the impact of their economic, social, and environmental policies, as well as their relationships with customers, employees, suppliers, shareholders, and communities. CSR has become a multi-billion dollar public relations specialty in the business world, yet there are those who argue that the positive impact of CSR on businesses is overblown and say companies exist to sell products, make money and please shareholders — not to save the world.

American CEO’s take on Europe
By Del Jones .................................................................................8-9

Eco-marketing a hot topic for advertisers at Cannes
By Laura Petrecca and Theresa Howard ............................................................................ 10-11

Critical Inquiry
Discussion and future implications ..................................................................................12

Businesses grow more socially conscious
More think strategy can also be profitable
By Edward Iwata USA TODAY Activists have argued for decades that companies, as good corporate citizens, are morally obligated to adopt socially responsible business practices. On their end, companies say they exist to sell products, make money and please shareholders — not to save the world. But those clashing views may be finding common ground, say business experts on the movement known as "corporate social responsibility," or CSR. There's growing evidence that companies are embracing CSR practices - whether it's reducing factory and transportation pollution, using natural materials for packaging or treating workers fairly — because they believe such strategies can be profitable and socially responsible. "All of a sudden, corporate responsibility is an idea whose time has arrived," says Julie Fox Gorte, chief social investment strategist at the Calvert Group, which manages socially responsible mutual funds. "We're seeing more companies who think it's not just a philosophy, but good for business, too." Study shows value Christine Arena, a San Francisco business consultant and author of The High-Purpose Company, says more

Additional Resources and Voices extension
.................................................................................. 13

USA TODAY Snapshots®
Mix ing ads and social issues
Is it acceptable for companies to involve a cause or issue in their marketing?




Not sure 5%

Source: Cone Corporate Citizenship study of 1,033 respondents. Margin of error ±3 percentage points.

By Dar ryl Haralson and Alejandro Gonzalez, USA TODAY

© Copyright 2008 USA TODAY, a division of Gannett Co., Inc. All rights reserved.


corporations are using CSR not for feel-good philanthropy or to polish their public image, but as long-term corporate strategy. Arena and 10 MBA students at McGill University studied 75 U.S. corporations, including Wal-Mart, McDonald's, Volvo, JetBlue, outdoor retailer Patagonia, clothing designer Eileen Fisher and agricultural products company John Deere. They found that many are visionary, risk-taking companies that Arena calls "the early adopters, the alphas of the modern business world." The companies are staking their business growth and future on environmental and social goals. For instance: u General Electric. CEO Jeffrey Immelt announced GE's "Ecoimagination" initiative two years ago, and the conglomerate hopes to double its revenue from environmentally clean technology to $20 billion by 2010. Among the products and services: fuel-efficient jet and train engines, wind turbine power, energy-saving fluorescent light bulbs and water purification projects. u Toyota. Critics scoffed when it launched the Prius hybrid car in the USA in 2000 and in Japan a decade ago. Today, the Prius is so popular that Toyota expects to sell millions of hybrid cars and SUVs worldwide by 2010 in the Prius, Highlander, Lexus and Camry models. Now, Ford Motor, Nissan, General Motors and others are going the hybrid route. u Wegmans Food Markets. While many businesses suffer from poor staff morale, this $4 billion retailer boasts a worker-friendly culture and cost savings from low turnover of employees. Workers enjoy generous salaries and benefits, vacation time and training. Each year, 130,000 job hunters apply to Wegmans — ranked No.1 in Fortune's "Best Large Companies to Work For" list in 2005. "It's not a fleeting fad," Arena says. "These companies are investing money in a way that creates social, environmental and financial value. They can't afford to stop investing in this higher purpose." But many companies still ignore CSR issues, she says. In her study, 14 of 75 failed the litmus test. They preached social values, but made fewer investments in CSR practices than "high-purpose" companies did. Companies such as ExxonMobil, she says, face lawsuits and a public backlash when they fall short on environmental and social issues. A federal judge recently ruled that ExxonMobil must pay $2.5 billion in damages from the Exxon Valdez oil tanker spill in 1989.

Jack Gruber, USA TODAY

Consultant: Christine Arena, author of The High Purpose company, works in her San Francisco home.

Economists and executives have debated for decades whether CSR practices help the bottom line. The late economist Milton Friedman panned social values in the boardroom, saying the No.1 goal of businesses is to boost shareholder value. Leading scholars such as David Vogel, author of The Market for Virtue, believe the positive impact of CSR on businesses is overblown. But CSR gained momentum in the 1980s, when the antiapartheid movement forced firms to withdraw investments from South Africa, and in the 1990s, when garment and retail companies were blasted for their suppliers' sweatshop labor conditions. More companies realized they could not ignore the link between their businesses and social issues. In the most sweeping research on the topic, the University of Redlands' Marc Orlitzky and the University of Iowa's Sara Rynes and Frank Schmidt looked at 52 studies — covering 34,000 companies worldwide — on corporate social responsibility over a 30-year period. 'A virtuous cycle' Their 2004 study found that well-run, profitable businesses also boasted strong social and environmental records, and vise versa. Overwhelmingly, firms that

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rewarded employees with good work climates and higher pay and benefits ultimately saw stronger sales and stock prices, plus less employee turnover. "It's a virtuous cycle," Rynes says. "As a company becomes more socially responsible, its reputation and financial performance go up, which causes them to become even more socially responsible." Clearly, CSR isn't going away. "Some still think CSR is a distraction," Orlitzky says. "But more business strategists now believe that social responsibility has economic value." Hundreds of corporations churn out annual "CSR reports" that tout their social consciences and business practices. Investors poured $179 billion in 2005 — up from only $12 billion a decade earlier — into socially responsible mutual funds, reports the Social Investment Forum. Businesses and environmental groups are even joining forces. Last month, the U.S. Climate Action Partnership — a new alliance that includes GE, DuPont, Alcoa, Caterpillar, Duke Energy, Environmental Defense and the Natural Resources Defense Council — urged lawmakers and the White House to reduce greenhouse gas emissions and hasten technology research. DuPont's transition Many CSR experts point to DuPont, the $27 billion chemical manufacturer in Wilmington, Del., as a company evolving successfully from the old smokestack industry era into the environmentally aware 21st century. DuPont used to rely heavily on fossil fuels to make paint, plastics and polymers. But in the 1990s, DuPont —

renowned for its R&D that created products such as the synthetic fiber nylon — decided to pour billions of dollars into safe, environmentally friendly products. For instance, DuPont and British food refiner Tate & Lyle make Bio-PDO — a corn-based chemical used in cosmetics, detergents and material in carpeting and clothing — at a $100 million plant in Loudon, Tenn. Since 1990, DuPont has cut greenhouse gas emissions by 72% and air carcinogen emissions by 92% at its facilities worldwide, says Dawn Rittenhouse, DuPont's director of sustainable development. But DuPont, like other companies that claim to be socially responsible, still faces some issues. DuPont faces lawsuits alleging that perfluorooctanoic acid (PFOA), a chemical compound used in the making of Teflon, poses public health risks and contaminates drinking water — charges denied by DuPont. Two years ago, DuPont agreed to a $16 million settlement with the Environmental Protection Agency after it was accused of failing to report data on PFOA, a likely carcinogen. DuPont later volunteered to halt by 2015 all PFOA emissions from its plants. Beyond the legal fights, DuPont keeps plowing new ground. The company vows to make $2 billion a year in revenue by 2015 from 1,000 products that save energy and reduce pollutants. "What's good for business," Rittenhouse says, "must also be good for the environment and for people worldwide."

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Boardrooms open up to investors’ input
More companies listening to their concerns, taking actions
By Edward Iwata USA TODAY As the 2007 proxy season winds down, activist shareholders are gaining more clout and a greater say in boardrooms on corporate-governance issues than ever before. Recent shareholder victories on key issues — plus a new willingness by companies to discuss boardroom topics — mark a turning point from the chilly ties and combative debates between the most vocal shareholders and companies. "This is the era of engagement," says Amy Borrus, deputy executive director of the Council of Institutional Investors, which represents public pension funds and other large shareholders. "Directors aren't just digging in and saying no. They realize it makes sense to listen to shareholders." A record 1,169 shareholder resolutions were proposed this year, says Carol Bowie, corporate-governance director at Institutional Shareholder Services (ISS), a proxyresearch firm. And a record 23% of those were withdrawn by shareholders after companies agreed to adopt new policies, or to sit down and discuss the issues. Since the 1980s, public pension funds and other activist shareholders have crusaded against poorly run companies and weak directors and executives. Their main weapon has been shareholder resolutions aimed at companies and urging investors to vote on various issues before annual corporate meetings. Shareholders have fought outrageous CEO pay packages. They've urged spineless directors to provide stronger oversight of management. They've pressured executives to police their companies for accounting fraud. For many years, business leaders dismissed dissenting shareholders as rabble-rousers who dragged social, labor and environmental issues into the boardroom. They argued that executives and directors, not investors, should run companies.

Today, though, companies can no longer ignore shareholders, whose proposals on CEO pay and other hot-button issues are receiving record high "support" votes of 30% to 60% from investors. In earlier years, votes of 2% or 3% were common. Shareholders' votes are only advisory. But publicly traded corporations can ill-afford to anger investors who hold billions of dollars in stock. Page 4

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In June, for instance, one-third of Yahoo shareholders — upset over the Internet giant's poor stock and earnings performance and former CEO Terry Semel's $108 million pay package — voted against re-electing one or more Yahoo directors. The high "no votes" were believed to be a big factor in Semel's resignation as CEO, although he remains board chairman. Better relations This year's proxy season also shows that relations between shareholders and companies clearly are improving, with more corporations and investors seeking common ground on issues. "It's staggering — there's definitely a sea change going on," says Carolyn Kay Brancato, governance director at The Conference Board, a business-research organization. "Companies are taking shareholders' issues much more seriously than they used to." There are several reasons for that: uIn the post-Enron era, companies have strengthened their oversight because of tougher anti-fraud and accounting laws, the federal crackdown on corporate crime, and court rulings that say directors can be held liable in shareholder class-action lawsuits. uMore investors and companies realize that corporategovernance, labor and environmental issues are mainstream investment issues, not "fringe nuisance proposals" that surface at annual meetings, says Howard Sherman, CEO of the GovernanceMetrics International research firm. "These issues have financial impact and can affect portfolio returns," Sherman says. uFaced with Congress and the Securities and Exchange Commission imposing new rules and regulations, a growing number of executives and directors prefer to meet privately with shareholders over corporate-governance issues. "Rather than wait for something to be mandated, smart companies implement best practices voluntarily and on their own timeline," says Tracey Rembert, senior gover-

nance analyst for the Service Employees International Union (SEIU). Business leaders argue that some activist shareholders overstep their legal bounds. State corporation laws give directors and management, not shareholders, the power to run companies, says John Castellani, president of the Business Roundtable, an organization of U.S. executives. "At a certain point," Castellani says, "executives become so distracted by these issues to the detriment of producing shareholder value." Businesses also argue that some labor and environmental activists advance their political agendas, rather than address broader corporate-governance issues. David Hirschmann, senior vice president at the U.S. Chamber of Commerce, warns that too much shareholder power will lead to divided boards and directors beholden to special-interest groups. Nonetheless, shareholders and business officials say there have been several breakthroughs this year, including: uMajority voting proposals. In one of the most hotly debated proxy issues over the past decade, shareholders have pressed companies to adopt majority voting for directors to be elected to board seats. For decades, board directors were elected by a simple plurality vote, or whoever received the largest number of votes. Activist shareholders contend that the plurality system made it difficult to oust lame directors, and that it's more democratic to choose directors by a 51% majority vote. So this year, activist shareholders — such as the United Brotherhood of Carpenters and Joiners of America pension fund — filed 140 resolutions with companies, urging shareholders to approve majority voting. To the surprise of shareholders, more than half of those companies agreed to voluntarily adopt majority voting, so shareholders withdrew their resolutions, according to Bowie at ISS.

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"This is absolutely unprecedented, for so many proposals to be withdrawn," Bowie says. Following the lead of Colgate-Palmolive, Pfizer and others, more than 400 U.S. companies have adopted majority-voting policies — "a very healthy trend," says Sherman of GovernanceMetrics. uSummit talks. Shareholders and business leaders are cooling the fiery rhetoric and forming several working groups to hash out the most troublesome proxy issues, from out-of-control executive pay to the shareholders' "majority-vote" issue. High-powered shareholders and corporate leaders recently signed "The Aspen Principles," an agreement to work closely on executive pay and other issues. The parties included the AFL-CIO labor federation, the Business Roundtable trade group for executives and the Council of Institutional Investors. In another big summit in New York this summer, 150 shareholders, executives and directors met in conference rooms at the Latham & Watkins law firm to air their views — and possible solutions — on shareholder resolutions seeking to cap sky-high pay to executives. What's more, pharmaceutical giant Pfizer said recently that it will meet yearly with large shareholders to discuss corporate-governance and pay issues. Dozens of companies have called Pfizer to ask about its plans, according to Margaret Foran, senior vice president of corporate governance at Pfizer. "People are coalescing around issues," Foran says. "They're looking at the pros and cons in good faith." uGlobal warming resolutions. A record 43 global-climate resolutions were filed by Trillium Asset Management, Calvert mutual funds, the SEIU and the North Carolina state treasurer with energy, auto, homebuilding and financial companies. Shareholders withdrew one-third of the resolutions after the companies — ConocoPhillips, Toll Bros. and others —

agreed to reduce their greenhouse gas emissions or report on their energy-efficiency plans. The resolutions that went to a shareholder vote garnered a record 22% support, says Ceres, a coalition of large shareholders and environmental groups. No longer are environmental resolutions ignored as tree-hugger issues, says Ceres President Mindy Lubber. At her group's first conference on global warming in 2003, turnout was low. Now, the conferences are jammed with senior executives furiously taking notes. "Climate risk," Lubber says, "is a fundamental economic issue that affects shareholder value, the strength of companies and the fiduciary duties of corporate board members and large investors." uOut-of-control pay. As pay keeps rising for CEOs, shareholders keep pushing to cap excessive salaries and stock packages for executives whose companies perform poorly. Last year, shareholders were outraged over sky-high compensation and retirement pay to former CEOs at Home Depot, Pfizer and other companies. So this year, a record 124 pay-related resolutions by shareholders received average support votes of 30% to 43% at Apple, Hewlett-Packard and other companies, according to ISS. The resolutions sought to link executives' pay to their performance, to give shareholders advisory votes on pay and to halt the controversial practice of backdating stock options. Aflac, the health-insurance firm in Columbus, Ga., became the first major U.S. company to voluntarily give shareholders an advisory vote on executives' pay, starting in 2009. In a statement last spring, CEO Dan Amos said that shareholders, as owners of the company, "have the right to know how executive compensation works."

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Unresolved issues Not all shareholders and companies get along, of course, and many obstacles remain. For one, activist shareholders of ExxonMobil accuse the oil behemoth of ignoring their concerns about global warming. Investors say the company trails BP, Chevron and other rivals in dealing with climate risks. Last May, shareholders holding $120 billion, or 31%, of ExxonMobil stock, voted for a resolution urging the company to reduce greenhouse gas emissions. Several explosive issues loom, including a long-running and divisive battle at the SEC over rulemaking on shareholders' access to the proxy. Proxies, the main arsenal of

shareholder activists, are the written authorizations that give shareholders the power to vote on issues at annual company meetings. More shareholders also are debating whether to divest their holdings from global companies with business ties to countries such as Sudan and Iran, accused by the State Department of sponsoring terrorism. Business leaders such as the U.S. Chamber's Hirschmann, though, are cautiously optimistic that companies and shareholders will slowly forge ahead on proxy issues. "We may not agree with everything, but most boards are eager to engage with shareholders," he says. "This dialogue is very helpful."

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American CEO’s take on Europe
By Del Jones USA TODAY Europe vs. the USA. Which economic system is most viable in a global economy? European Union countries lean toward socialism, with a larger safety net. The USA leans toward capitalism and opportunity. Which is best? USA TODAY corporate management reporter Del Jones asked Stuart Graham, 61, the American CEO of Skanska, a construction giant based in Stockholm and a company large enough that it would rank about No. 125 on the U.S. Fortune 500. Q: Six-week vacations, 35-hour weeks, universal health care and day care, paid maternity leave, paid sabbaticals. It sounds grand, but how can Swedish companies be so generous and still compete? A: France and Germany have suffered from their overly generous employment and labor laws. Sweden, on the other hand, is prospering despite long vacations and its social net. I honestly don't know the answer, but this is probably the most technologically connected country in the world. Swedes take a longer-term perspective, and that investment in the future pays off in productivity and performance. The corporate tax rate in many European countries is high, but in Sweden it is lower than in the U.S., although the individual tax rate is very high (up to 60%). There is less incentive to distribute earnings and dividends, so companies invest in the future of the business. Q: You're saying that Sweden has no disadvantage? A: Oh yeah. The Social Democrats were defeated (in 2006) for the second time in the last 70 years, and that is because there is a belief here that the social system has some negatives and needs to be adjusted for the economy to be stronger. They know that global competition is only going to get more intense. Sweden is a country of 9 million people. Its big companies can't survive selling at home. Eighty percent of Skanska's business is outside of Sweden. Q: The trend here is going the other way, with the Democrats taking control of Congress and in strong contention for the White House. Is there pressure in Sweden to make its business climate more Americanlike? A: It wouldn't be popular in Sweden to characterize it that way. But Sweden is a member of the EU, and there are basically no borders regarding competition. Labor can move freely; it's easy to trade goods. That alone forces countries to be more competitive. The EU block is also competing with China. Europe is the oldest of Western economies. People look for more leisure time and support from the government. The U.S. is less so, but China is a lot less so. Q: In 20 years will the U.S. business environment be more like Europe's or vice versa? A: With prosperity comes more responsibility towards your people and the world in general. U.S. business is evolving, taking more responsibility for its impact on the environment, even ahead of government regulation. The U.S. will evolve toward a better safety net. The future is that there will be no letup in the demands of shareholders for financial performance. There will also be no letup in the demands of society that businesses behave responsibly. Management just has to get better. Q: OK, let's cut to the chase. You have children who have recently reached adulthood. In what country, under what system, would they have the greatest opportunity to succeed and/or be happy? A: Given the size of the market, given that my children are American, the greatest opportunity for them is in the U.S. The track record of the U.S. in providing opportunity — nobody has matched it for 50 years. Look at how the immigrants to the U.S. have prospered. Q: The flood of illegal immigrants into the USA is proof that our system is better? A: The same problem exists in all of Western Europe. People are looking for a better life. Obviously, it's easier to come to the U.S. from Mexico. If you're in Central Europe it's easier to come to Western Europe. You can move from Poland legally because there are no borders in the EU for labor, and something like a million Poles have gone to Western Europe. Now there is a labor shortage in Poland where the economy is booming. The price of labor is going way up, which means that people will be moving back.

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Q: Skanska hires all over the world. Does it hesitate more to add workers in Sweden because it's hard to fire them? A: It's more expensive, not more difficult, because laws require more compensation. If I add a thousand more people and the cycle turns down, it's going to cost me a lot to get rid of them. However, that is a moot point because we have an acute shortage of construction workers in Sweden. We're trying to entice people to come here. Q: Where in the world do you find the most productive workers with the best work ethic? A: We have 12,000 projects, so I see vast differences in productivity. But I can't attribute it to a country or a culture. I attribute it to the management on a project. Productivity is not the willingness of the workers but how good and demanding the supervision is. Q: It must be awkward to have labor union members at Skanska's board meetings. A: There isn't an us-and-them mentality. It's the opposite. The board members representing the employees are supportive of the company and management. In the five years I've been CEO we have not had one issue where the union members and the rest of the board were at odds. Q: Norway has a law that requires 40% of directors be women. Would that be OK too? A: There have been voices agitating for that in Sweden. I believe in diversity, but not quotas. Q: Which country worldwide has the best health care system? A: If I had the answer to that I could make a lot of money, or do something smart for our company. I look at the health systems in various countries. I must confess, I don't know what is the best system. No matter where you go there is a big problem. It's a complex issue and so interrelated with the culture, tradition, the laws of the country. They all have major flaws. The U.S. ultimately needs to provide health care for all Americans. In Europe, they have universal health care, but with drawbacks. Your choice is limited; you're inconvenienced and severely restricted. If I had to wait five to six months for surgery, I wouldn't like it much.

Q: Do you make less than if you ran an $18 billion company in the USA? A: I made $3 million last year at today's exchange rate. The dollar is falling, so it looks better than it actually is. If I ran a company of this size in the U.S., it would be significantly higher. Q: At least you don't have to deal with all the negative publicity that high-paid U.S. CEOs put up with. A: Scrutiny is more intense in Sweden. In the U.S. they object to obscene payouts, $60 million, $120 million. They don't make noise about a guy who makes a crummy $10 million or $20 million. In Sweden they object to everything. Q: The USA is not very popular globally. Any advice for U.S. companies operating abroad? A: Europeans respect and admire the U.S. economic prowess and success. We are unpopular because of foreign policy and political reasons. People don't view business nationalistically, although big business has a bad image to the man on the street in all countries. What I would advise any American is not to come to Sweden or any country and try to tell everyone that Americans have all the answers. Even if you go from New York to West Virginia, I don't think it's a good idea to tell everybody how smart you are and how dumb they are. It's human nature that people will resent that.

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Eco-marketing a hot topic for advertisers at Cannes
Green stance doesn’t hurt companies’ rep, sales or profit
By Laura Petrecca and Theresa Howard USA TODAY CANNES, France — Going green is red hot in the ad world. Paint companies, laundry-detergent makers, softdrink producers and locomotive sellers are among a multitude of marketers trying to position themselves as environmentally friendly. Green "has gone mainstream," says Allen Adamson, managing director at branding agency Landor Associates and author of BrandSimple. "Everyone has jumped on this bandwagon." And that has made "eco-marketing" a hot topic of discussion here at the Cannes Lions International Advertising Festival, the industry's biggest global trade and awards show. It's also on the official agenda. Today, former vice president Al Gore will be here to speak on what advertisers and ad agencies can do to "raise awareness of the climate crisis around the world." Gore's seminar follows a discussion on Wednesday hosted by global ad giant Havas that examined good and bad attempts at green marketing. Also here, the non-profit ACT Responsible group of ad and media pros sponsored an exhibition of socially responsible ads with a large section for green ads. On a lighter note, Alice Audouin, sustainable development director at Havas Media in France, will lead a group of ad industry women in swimsuits on a cleanup of litter on the Cannes beach on Saturday. She says they aim to show that social responsibility can be fun and even "sexy." The popularity of Gore's global-warming documentary, An Inconvenient Truth, along with an increased emphasis on climate issues in schools, are two huge factors fueling consumer interest in the green movement, Adamson says. That has companies taking action, from buying alternative energy credits to reducing plastic packaging to donating loads of money to Earth-friendly charities. Levi Strauss introduced Levi's Eco jeans last year, made from 100% organic cotton. They're also spending to let people know about their goods, services and events that relate to the environment. In the three months ending June 14, marketers shelled out a combined $18 million on green-focused TV ads, according to TNS Media Intelligence. Those ads ranged from Earth Day sales promotions to commercials for hybrid cars. While an environmentally sound stance is good for Earth, it doesn't hurt a marketer's brand reputation — and increasingly it is a path to higher sales and profits. About 35 million Americans regularly buy green products, according to research group Mintel. And research shows many folks will pay more for ecofriendly goods or services, says Adamson. Adamson and other marketing experts warn, however, that when it comes to touting an eco-friendly message, marketers had better be ready to back it up — or face backlash from consumers. "You've got to show that there's substance behind what you say," says Hamish McLennan, global CEO of ad agency Y&R, which is hosting the Gore seminar. "Otherwise, it could backfire." Dozens of marketers — including oil companies and automakers — have been criticized in the media and on blogs for what appears to be more hype than action on the green front. There's even a term for playing up an eco-friendly stance when a company may actually be doing, on balance, more harm than good to the environment: "greenwashing." Page 10

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Joanne Bradford, chief media officer at MSN, says she is well aware that tying with a green issue comes with scrutiny. Microsoft's MSN is lead media sponsor of the upcoming series of Live Earth concerts to raise awareness of global warming. Microsoft has touted its success in reducing fuel emissions, and Bradford says her team has worked to cut paper use. But she is open about the limitations on a person or company going completely green: "We're just trying to be thoughtful about it. There are all sorts of little things that you can do every single day." In posting online content, MSN also has to balance its green focus. "Whether you're buying natural ingredients for your skin care or deciding what type of fuel economy you want with your car, we want to provide you with that information," she says. "But I don't think you'll see everything we do be green. It's not going to be the all-green auto channel, because people want options." Others greening their image: uNedbank. In one of the most direct examples of green marketing, this South African bank took the Grand Prix in the outdoor ad competition at Cannes this week for its Power to the People billboard. The sign has 10 solar panels, each generating 135 watts of electricity, that are powering the kitchen of a nearby primary school. uGE. It began its Ecomagination campaign two years ago. The made-up word represents GE's commitment to spend more than $1.5 billion developing eco-friendly polices and products, from clean coal technology to energy-efficient washing machines and light bulbs, by 2010. The Ecomagination campaign of TV, print and Web executions, by BBDO in New York, will get nearly 100% of GE's corporate ad budget this year.

"Ecomagination is a business initiative first and foremost," says Judy Hu, general manager for corporate advertising. "We aren't being charitable. We're doing something that makes good business sense." uTimberland. The apparel and shoe company last fall began using shoe boxes of 100% recycled material and introduced a so-called nutritional label, similar to food labels, that list such things as the shoe's environmental impact in areas such as renewable energy. This spring, Timberland also added Green Index tags to five shoe lines. The tags give environmental ratings for each based on the impact on the climate of making the product, chemicals used to make it and its organic, renewable and recycled materials contents. uPepsiCo. It has made a companywide commitment to environmental action such as using more solar energy at its facilities, recycling water and purchasing renewable energy credits that subsidize develop clean sources such as wind power. Pepsi is a sponsor for the July 7 Live Earth concerts. Concertgoers who turn in Pepsi containers at stores at the concert venues get credit toward buying recycled products. For instance, at Giants Stadium in New Jersey, people can turn in cans and bottles for a messenger bag made from recycled material. uEMP. The Lithuanian electronics recycler won a Silver Lion for media planning with a campaign encouraging people to turn in for recycling old electronics sitting unused in attics and garages. EMP worked with Universal McCann to place old TVs on buses, with a message about how much space they waste. The campaign also included e-mailing of videos showing funny ways people get rid of old electronics. They got substantial pass-along distribution and showed up on video-sharing websites.

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Discussion Questions:
1. Choose a company that you do business with on a regular basis. Examine their economic, social, and environmental policies. What changes might they make to one or more of these areas that would increase their social impact while preserving or increasing shareholder revenue? 2. Review USA TODAY and find a featured entrepreneur that has created a business model that most exemplifies the ideals of corporate social responsibility. 3. Review the “Today’s Entrepreneur” archives at: http://www.usatoday.com/money/companies. Which of these featured entrepreneurs has created a business model that most exemplifies the ideals of corporate social responsibility? 4. Yaron Brook says, “Corporate altruism is not only destructive, it is immoral.” In light of Bill Gates’ recent call for "creative capitalism" that uses market forces to address poor-country needs and his decision to grant $306 million to develop farming in poor countries, what points might be made in support of Brook’s viewpoint? What points could be made against her position? 5. Why do businesses exist? What is the purpose of a business, or, ultimately, any economic system? Explain your philosophy. 6. At what point does “greenwashing” (the term for playing up an eco-friendly stance when a company may actually be doing, on balance, more harm than good to the environment) become an impediment to overall business performance, and a reason for you, as an individual, to take your business elsewhere? Explain.

Future Implications:
1. Given the choice between government responsibility for bettering the social ills of the world and CSR, which holds the most hope for a more just, peaceful and healthier future? Provide a solution that would utilize both. 2. Discuss the role that increasing affluence, changing social expectations and globalization will play in the importance of CSR in the future. What other changes in business practices are likely to result from these issues? 3. Stuart Graham contends, “The future is that there will be no letup in the demands of shareholders for financial performance. There will also be no letup in the demands of society that businesses behave responsibly.” Are these two goals mutually sustainable? Why or why not? 4. In a speech at the World Economic Forum in Davos, Switzerland, Bill Gates called for a "creative capitalism" that uses market forces to address poor-country needs that he feels are being ignored. "We have to find a way to make the aspects of capitalism that serve wealthier people serve poorer people as well." To what degree should companies with fewer resources and profits than Microsoft have a responsibility to address the social ills of the United States and/or the world? Debate this issue with your peers.

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Voices Extension:
1. Review each of the following issues on the Voices website at voices.usatoday.com : stem cell research, health care, and energy. Choose one of the topics and make recommendations for specific changes to that industry that would improve its economic, social, and/or environmental policies, while preserving profitability. 2. After exploring the issue of sustainability at: usatoday.com/educate/college/voices/issues/sustainability.html, debate how businesses should balance the issue of icnreasing profits against the need for sustainability. Under what, if any, circumstances should profits be limited in the interests of ecological protection or social justice? 3. Viewing your college or university from a business perspective, what steps have been taken by the administration, faculty and/or students to promote environmental sustainability? Share the best solutions at: usatodayeducate.com/best_practices/going_green.cfm. What additional changes could be made to ensure the economic, encironmental and social sustainability of your school as an institution?

Additional Resources:

uCorporate Social Responsibility Initiative – The John F. Kennedy School of Government ksg.harvard.edu/m-rcbg/CSRI The Corporate Social Responsibility Initiative at The John F. Kennedy School of Government is a multi-disciplinary and multi-stakeholder program that seeks to study and enhance the public contributions of private enterprise. It explores the intersection of corporate responsibility, corporate governance, public policy, and international development. It bridges theory and practice, builds leadership skills, and supports constructive dialogue and collaboration among business, government, civil society and academics. uCSRwire – The Corporate Social Responsibility Newswire csrwire.com CSRwire is a leading global source of Corporate Social Responsibility news. uBusiness Ethics – The Magazine of Corporate Responsibility business-ethics.com/ Celebrating its 20th anniversary, Business Ethics is now an exclusively online magazine offering information, opinion and analysis of critical issues in the field of corporate responsibility.

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