It Seems to Me
As an advocate of corporate social responsibility for 40 years now, it’s astounding to see how far this movement, if we can call it that, has come. Not a day goes by without signs that it has taken root in the world of business, leading to actions that were unimaginable four decades ago.
When I began publishing my newsletter, Business & Society, in 1968, it dealt with the formation of new groups such as the National Alliance of Businessmen and the National Urban Coalition, campaigns to get more minorities hired at corporations and placed on corporate boards. One of my early issues reported how Secretary of Commerce Alexander Trowbridge asked 500 corporations to help in hiring the rural poor and the unskilled. Only 49 companies pledged cooperation, 47 flatly refused and 385 did not bother to respond. We quoted the late Senator Daniel P. Moynihan: “I’ll tell you what our responsibility is. It’s to tell white America, rich America, that it’s about the last chance to deliver. For instance the business community. They got all excited about the urban crisis, unemployment of Negroes, and so forth. However, so far I think the business community has treated this as another wrinkle in their Community Chest work.”
Contrast that scene with what’s happening today. In the first month of 2007, Business Week carried a cover story headlined: “Imagine a world in which socially responsible and eco-friendly practices actually boost a company’s bottom line. It’s closer than you think.” The authors speculated that social responsibility programs “could help investors sort long term survivors from the dinosaurs.”
The Norwegian pension fund (Europe’s largest public fund at $300 million) has barred investments in 21 companies deemed to be unsuitable on ethical grounds. Among the companies on the blacklist are: Wal-Mart, General Dynamics, Boeing, Honeywell and United Technologies. Grounds for exclusion: human rights violations, environmental damage, gross corruption, and other serious violations of fundamental ethical norms.
General Electric, still a pariah in the social investment world, reported that in the past two years it has doubled sales from such environmentally friendly products as wind turbines, water purification systems and energy efficient appliances. GE’s “ecoimagination” business now adds up to annual sales of more than $12 billion – and it’s still climbing.
JP Morgan Chase has set up an investment banking unit centered on alternative energy – and recruited Vandana Gupta from General Electric to head it.
Citigroup has committed $50 billion over the next 10 years to environmental projects.
India-born Indra Nooyi has risen to the CEO’s position at PepsiCo and she predicts that the number of women running American companies could double in the next five years. Right now 11 of the Fortune 500 companies have a female CEO. (In 1968, the number was zero.)
Florida passed legislation that would bar the state’s pension fund from investing in foreign companies with economic ties to the energy sectors of Iran and the Sudan. (U.S. companies are already barred from such activities by law or executive order.)
Unilever, the Anglo-Dutch consumer products giant, announced that it will ban the use of skinny models in its worldwide advertising campaigns. This action responds to criticism that the fashion industry promotes an emaciated look among girls, leading to disorders such as anorexia.
Finally, a first: a course in social investment at a major business school. The Haas Business School at the University of California at Berkeley will offer such a course in its regular curriculum this coming fall. The instructor will be Lloyd Kurtz, senior portfolio manager at Nelson Capital Management, a unit of Wells Fargo Bank.