Comments on: What’s BP’s social responsibility? Sun, 28 Jul 2013 14:34:09 +0000 hourly 1 By: Wed, 21 Jul 2010 18:02:57 +0000 CSR has become much more effective since the focus has moved from avoidance (of sin stocks) to shareowner activism. Of course it is the government’s job to channel the power of corporations and to ensure against externalizing costs. However, who do you think largely controls the government? As a lobbyist, I spent years writing California’s legislation. Typically bills were written or amended by the very industry lobbyists the legislation appeared to regulate.

I came to the conclusion that we aren’t likely to have governments that operate democratically until we have businesses and other institutions that are also more democratically governed. Shareowners, for example, are charged with electing corporate directors but we can’t even nominate directors without going through a very expensive proxy contest. Even proxy access would only give us the ability to nominate a token few.

I agree with a recent report, “Compensation Complicity: Mutual Fund Proxy Voting and the Overpaid American CEO,” by AFSCME, The Corporate Library and which analyzed mutual fund voting patterns. The Report offers two action recommendations:

1. Retail investors in mutual funds, should critically evaluate how their mutual funds vote. New tools such as those available at make this task much easier. (For example, see their ranking of votes on: director elections, executive compensation, corporate governance, and corporate impact. Please send them a donation to support their work. Another excellent source of information is Jackie Cook’s Fund Votes.)
2. Investors should consider shifting their investments from fund families whose voting practices and records are not responsible to fund families with more responsible practices and records, provided the fee and performance characteristics of the funds are comparable. If more responsible fund families are not available — for example, because the investor’s investment is made through an employer-sponsored benefit plan with limited investment choices — the investor should lobby for expanded choices.

By: Adam66 Wed, 21 Jul 2010 17:33:27 +0000 Dear Ms. Freeland:

I find myself agreeing and disagreeing with your post at the same time.

I think the central problem is that the term “CSR” means different things to different people. To BP, it meant a variety of things, and these definitions seemed to have shifted over time. Lord Browne took an important stand on climate change, but the company’s real financial commitment to alternative energy paled in comparison to its promotion of its “Beyond Petroleum” image. That’s not “CSR”, that’s “greenwash” or “propaganda” to use an older term.

BP also committed to greater public transparency about all aspects of its business, including its safety and environmental record. It disclosed, for example, how many spills it caused each year, and how many gallons were spilled. Most of BP’s peers will not disclose this information. That commitment to transparency is also “CSR.”

Your fear that CSR will distract business leaders from their central purpose is exaggerated. There is absolutely no risk that public companies will ever forget to pursue profit. That is a sure recipe for bankruptcy. Many companies, however, have forgotten their obligations to make money “within the rules of the game” to use Milton Friedman’s phrase. If a company cannot make money without killing people and destroying the environment, it has no right to be in business.

The greater risk is that investors, consumers, communities, reporters, and business leaders will fail to take a hard enough look at a company’s CSR efforts, and fail to see what’s truly important. Worker health and safety and environmental compliance are core responsibilities all oil and gas companies owe to society. The company’s obligation to make money is constrained by its obligation to do so safely and responsibly. Before the accident, BP was one of the largest companies in the world by market capitalization. That is sufficient evidence that most investors did not bother to examine BP’s frightening safety record before choosing to buy its stock.

I agree that corporate philanthropy is nice, but insufficient. That is no reason to paint all “CSR” activities with the same brush. There are many companies that take CSR quite seriously, working to embed these concepts into their core business operations. There are many, many examples. The fact that BP is not one of them does not mean that the whole concept is bankrupt.

I also agree that CSR can never replace effective regulation. No regulator, however, will ever be able to fully and effectively constrain the worlds’ public companies set loose without any internal ethical or moral guidelines except to “make money.” This is particularly true for companies with global operations. There is no single government with the power or the authority to regulate all operations by a multinational.

In the end, we need both effective regulation and strong CSR programs. We also need more conscientious investors who are willing to demand more responsible behavior.

Adam Kanzer
Managing Director & General Counsel
Domini Social Investments LLC

By: JohnF500 Wed, 21 Jul 2010 04:08:22 +0000 This is an interesting article, honest and hard-headed. The CSR is a broader category of which “green washing” is a part.

The system called for, though is a cat and mouse game. And in the U.S., where money is speech, the mouse owns the cat.

By: MLatvenas Tue, 20 Jul 2010 12:49:38 +0000 I read this pretzel of an article and am having a hard time following your logic. “the chief social responsibility of business is to make a buck”, you say, in the best tone-deaf, last-century rabid capitalist meme. “any of the business disasters of the past 24 months have been facilitated by the mini-industry of corporate social responsibility….” REALLY???? So capitalists are blaming social responsibility for BPs results this quarter? Why the heck are you bringing up Madison Avenue advetisers…. they just mix the koolaid!
Here is a suggestion: replace “shareholders” with “stakeholders”, read up on the triple bottom line, (social, environmental, and financial bottom lines)or TBL. You may desperately want to turn a blind eye to the concept of companies needing to behave sustainably in order to survive, but IT´S THE FUTURE!! Companies like BP do not have a chance in hell of being SUSTAINABLE in order to benefit its shareholders, period. There is a point where capitalism turns into cannibalism, but I digress. Yuck, I feel like I´ve just been dipped into the Gulf of Mexico.

By: Hornblower Tue, 20 Jul 2010 10:09:12 +0000 The discussion in the US is out of focus and ill informed.
Let me remind you of the following facts.
BP is meetings it’s obligations,even though it did not itself cause the disaster.
The two American companies that were primarily responsible,TransOcean and Haliburton have cleverly kept media attention on BP.

Fortunately for the wildlife and fisherman of the Gulf of Mexico,BP is acting in an honourable fashion.

Compare the action of BP with the American Company, Union Carbide, which caused the biggest environmental disaster on the Planet,when over 15000 people were killed at Bhopal in India.
The attitude of Americans in general & Obama in particular is causing intense irritation in the UK.

It is your insatiable demand for cheap oil and gas that has caused this disaster.

By: Benny_Acosta Mon, 19 Jul 2010 21:58:43 +0000 Hydrology,

Check the link in my last post. There actually are answers to the global situation. It just requires individual acceptance and responsibility.

By: Hydrology Mon, 19 Jul 2010 21:30:54 +0000 The world economies will get a balance when the fundamentals of a capitalism society are protected from manipulators:

This simple equation could force a seeking balance.

investment = investment + profit

gambling = gaining or losing

Allowing a combined effect of greed + fears mars the regular functioning of offer + demand easily can lead to catastrophes like that one in 2008.

Easy profit is so close to easy losses that leaders are failing to protect the functioning of society.

There is a lesson about advanced countries and societies. They are not as intelligent and superior as they were assuming as they are leading on many catastrophes from economic, obesity, and even environmental ones.

When a person shows a high IQ profile I look at the size of the belly to see if any advanced brain performance is employed on adopting a healthy lifestyle. Do those wise guys know what is important in life?

I am trying to figure out about the difference of dying old poor/unknown or rich/famous.

Perhaps rich people die better and by using secrets accounts would have savings for eternal life.

By: Benny_Acosta Mon, 19 Jul 2010 19:21:04 +0000 Ms. Freeland

Greed, corporate or otherwise, is NOT acceptable. Greed is the very essence of egoism. Egoism is the desire to take all you can while thinking nothing of the other. Egoism ties us to animal behavior. Therefore greed is not good. It is needed in order to show us the difference between receiving for ourselves and bringing benefit to others. In the first instance (receiving for the self) there is a never ending quest for “more”. And it doesn’t matter how many “values” a person has to “compromise” in order to get what they want.

Every human being on earth behaves this way. But that doesn’t mean it is acceptable or even healthy to remain that way. We have to recognize our interdependence. Unless we wake up to this fact our problems will only get worse.

Take a moment to look at a short video clip about the natural law of interdependence. You will understand that greed is indeed not good. Of course you don’t Have To, check out the link. But then again, if you want to look like you know what you’re talking about, you might want to know about the alternative to greed. XA&feature=channel

By: theobvious Mon, 19 Jul 2010 17:39:07 +0000 alrite ill admit jonares got alittle carried away with how important CSR is, but hes rite it is important for profit. CSR isnt done to the point wher it is a liability for the company, it is done to the point where the marketing benefit is optimized. For an energy company this is alot, because almost all energy companys engage in CSR to promote ther use over substitutes. For an oil company it is imperative to keep public opinion in favour or prolonged use of fossil fuels, as widespread efforts to reduce them will lead to oil companys operating in an elastic business, one they do not wish to be part of at all. I see what the authors trying to say, but your point on CSR being a serious liability rather than a long term beneficial inconvenience sounds off from the point of a marketing director who uses CSR to keep customers from finding alternatives.

By: Benny_Acosta Mon, 19 Jul 2010 17:36:06 +0000 When it comes to social responsibility, individuals as well as organizations have to think long term. Money is only one component of profit.

If the communities in which you do business begin to fail, then your business will by necessity, fail in those communities as well.

With that in mind, businesses and individuals must not engage in activity that is harmful to society. But how do you know what’s “harmful to society”? You can’t measure it with some kind of formula. Therefore the only way to do this is individually by obeying the primary law of “love your neighbor as yourself”.

People with little or no understanding will scoff at this. But more people are waking up to the undeniable truth of it. Follow the link below and decide for yourself. g0