It’s that retrospective time of year, when we look back to see where we’ve been and hope to unearth some clues about where we are going. Last year at this time, I wrote, “2011 could well go down in history as the year that CSR began to go mainstream.”
Now, with 12 months’ hindsight, I’m happy to report that progress was made, but there were also blockbuster scandals that showed how far we still have to go.
Tipping Points On The Climate Front?
Cynics point out that it was only when Wall Street got walloped by Superstorm Sandy that human-caused climate change finally was acknowledged by the mainstream. Politicians like Mayor Bloomberg and Governor Cuomo made open reference to it – and Bloomberg Businessweek featured an article, “It’s Global Warming, Stupid.” (Even President Obama managed to say the “C” word – but only after he was safely elected.)
But the climate talks in Doha, which took place a month after Hurricane Sandy, failed to produce any binding international agreements, despite the fact that climate change wreaked more havoc in 2012 than ever – on the heels of the previous record set in 2011.
For moral and educational reasons it is still important to call on nations to act in these forums, but it is a serious strategic error to believe that global climate summitry will deliver anything approaching a binding and serious agreement to reduce emissions. These summits remain important because they are setting policy on issues like financing for climate adaptation. But they are not where we need to wage the fight for substantial emissions cuts.
Instead, the fight is moving outside the U.N. framework.
Bill McKibben’s group 350.org has begun a financial divestment campaign modeled on the one that helped bring down the apartheid regime in South Africa. Within one month, Go Fossil Free counted a victory in Seattle -- where the mayor sent formal letters to the city’s pension funds directing them to divest from any investments in fossil fuel companies – and chapters opened on 190 campuses, some of which scored some early gains.
But the real hope lies in spreading local movements to challenge fossil fuel companies, from fledgling Arab environmental groups, to coalitions between environmentalists, fishermen and homeowners fighting coal trains in Washington State, Indian tribes and climate activists battling tar sands in Canada, to a growing “glocal” movement against fracking that has slowed the practice in key areas like New York state. (And, no, natural gas is not friendly to the climate.)
It seems the world’s people are waking up to the fact that moving the needle back toward a livable climate will take their commitment to make it happen.
B-Corp Goes Big Time & Co-ops Get A Boost
New Economy business forms, like benefit corporations and cooperatives, saw their profiles boosted in 2012.
The B-Corporation idea made major headway this past year. It was featured in The New York Times, The Guardian, The Atlantic and other large media, and mentioned favorably by Bill Clinton.
By current count, 664 companies in 23 countries and 60 industries have joined the B-Corps bandwagon, including some big ones like Ben and Jerry’s, Etsy, Cabot Creamery (which is also a cooperative), Sustainable Harvest and Patagonia. Nine U.S. states had adopted legislation friendly to benefit corporations as of August 2012, with more considering it.
And the corporations-with-a-conscience model is working, despite a sluggish business environment. B-Corporations in the U.S. have increased hiring 5 percent, outperforming the larger economy.
The U.N. designated 2012 “The Year of The Co-operative.” Like benefit corporations, cooperatives are doing well, despite tough economic times, growing at roughly twice the rate of the larger economy. They comprise a major portion of global food production, including in the U.S., where 80 percent of dairy production comes from cooperative enterprises, both organic and conventional.
But they are not just in agriculture – they cover industries as disparate as banking (Rabobank) and manufacturing. The 300 largest cooperatives are reported to generate total revenues of $1.6 trillion.
Such manipulation of rates impacts everything in the financial industry, from derivatives trading to mortgages industry and municipal bonds.
It now seems, in fact, that no major banks will escape the scandal, as manipulation was “routine and widespread,” according to the British Financial Service Authority. Investigations have already taken scalps, notably the CEO of Barclays, who was forced to resign, and Swiss bank UBS, which will be reaching into its coffers for $1.5 billion in fines to regulators in the U.S., Switzerland and the U.K. But it won’t be known at least until next year what the real impact of the LIBOR shenanigans has been – or what the fallout will be.
Sandy Hook Puts Spotlight On Guns
The real Third Rail of U.S. politics (Social Security can’t claim that mantle since President Obama and Congress signaled readiness to subject it to major cuts) might just be finally losing some of its power in the wake of the shootings at Sandy Hook elementary school in Connecticut on December 14th.
Gun control has long been off the table, in spite of the fact that in the U.S., more than 30,000 people die from gun violence annually. That’s probably because U.S. firearms companies are hugely lucrative. They made almost $1 billion in profit in 2012. They employ an army of lobbyists – many of them former U.S. officials and lawmakers – ensuring that the fox guards henhouse when it comes to regulating guns. But after Sandy Hook, the political climate might be beginning to change, as the clamor to regulate assault weapons, at least, strengthens.
The road to reform won’t be easy, however.
The gun industry has been growing almost 6 percent a year since 2007, even while the rest of the economy tanked. And gun sales surged after Sandy Hook, driven by consumer fears that more regulation is on its way.
And the dots have not yet been connected in the public mind between domestic, civilian gun sales and the multi-trillion dollar global weapons business. According to Andrew Finestein, author of THE SHADOW WORLD: Inside the Global Arms Trade, the global trade in weapons is less regulated than the global trade in bananas. And even where regulated, as in arms embargoes, laws are not enforced or punished. Of 502 violations of UN arms embargoes, only two were prosecuted and one resulted in a conviction. He continues:
The profit motive behind the global arms trade is absolutely crucial. This is a business that is about big, big money. The trade contributes around 40 percent of all corruption in all global trade. So its impact on countries, on governments, on ordinary individuals in terms of the economic opportunity costs are absolutely massive.
Human rights advocates like Code Pink are taking up the issue. It’s one that should make it onto the CSR roster in 2013.
Part Two of this series will look at more top CSR stories of 2012, including labor, renewables, shareholder activism, and supply chain issues.