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Boardrooms open up to Corporate Social Responsibility

investors’ input
Corporate Social Responsibility (CSR) is a concept whereby corporations (or
By Edward Iwata other for-profit organizations) consider the interests of the societies within
....................................................................4-7 which they are based and operate. Moving beyond philanthropy and com-
pliance, CSR addresses how companies manage the impact of their econom-
American CEO’s take on Europe ic, social, and environmental policies, as well as their relationships with cus-
tomers, employees, suppliers, shareholders, and communities.
By Del Jones
.................................................................................8-9 CSR has become a multi-billion dollar public relations specialty in the busi-
ness world, yet there are those who argue that the positive impact of CSR on
Eco-marketing a hot topic for businesses is overblown and say companies exist to sell products, make
money and please shareholders — not to save the world.
advertisers at Cannes
By Laura Petrecca and Theresa Howard

Businesses grow more

............................................................................ 10-11

Critical Inquiry
Discussion and future implications
..................................................................................12 socially conscious
Additional Resources and
Voices extension More think strategy There's growing evidence that com-
panies are embracing CSR practices -
.................................................................................. 13
can also be profitable - whether it's reducing factory and
transportation pollution, using natu-
ral materials for packaging or treating
By Edward Iwata workers fairly — because they
USA TODAY believe such strategies can be prof-
USA TODAY Snapshots® itable and socially responsible.
Mix ing ads and social issues Activists have argued for decades
Is it acceptable for companies to involve a cause or that companies, as good corporate "All of a sudden, corporate responsi-
issue in their marketing?
citizens, are morally obligated to bility is an idea whose time has
adopt socially responsible business arrived," says Julie Fox Gorte, chief
practices. On their end, companies social investment strategist at the
say they exist to sell products, make Calvert Group, which manages
Yes No
72% 23% money and please shareholders — socially responsible mutual funds.
not to save the world. "We're seeing more companies who
Not
sure 5% think it's not just a philosophy, but
Source: Cone Corporate Citizenship study of 1,033
respondents. Margin of error ±3 percentage points. But those clashing views may be good for business, too."
finding common ground, say busi-
ness experts on the movement Study shows value
known as "corporate social responsi-
bility," or CSR. Christine Arena, a San Francisco busi-
By Dar ryl Haralson and Alejandro Gonzalez, USA TODAY ness consultant and author of The
High-Purpose Company, says more

© Copyright 2008 USA TODAY, a division of Gannett Co., Inc. All rights reserved.
AS SEEN IN USA TODAY’S MONEY SECTION FEBRUARY 14, 2007, 3B

corporations are using CSR not for feel-good philanthro-

py or to polish their public image, but as long-term cor-
porate 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 compa-
ny John Deere.

They found that many are visionary, risk-taking compa-

nies 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 con-
glomerate hopes to double its revenue from environ-
mentally 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 suf-
fer 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, environ-
mental 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 prac-
tices than "high-purpose" companies did.
Companies such as ExxonMobil, she says, face lawsuits
and a public backlash when they fall short on environ-
mental 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 posi-
tive impact of CSR on businesses is overblown.
But CSR gained momentum in the 1980s, when the anti-
apartheid movement forced firms to withdraw invest-
ments from South Africa, and in the 1990s, when gar-
ment and retail companies were blasted for their suppli-
ers' sweatshop labor conditions. More companies real-
ized they could not ignore the link between their busi-
nesses 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 busi-
nesses also boasted strong social and environmental
records, and vise versa. Overwhelmingly, firms that

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AS SEEN IN USA TODAY’S MONEY SECTION FEBRUARY 14, 2007, 3B
rewarded employees with good work climates and high-
er 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 compa-
ny evolving successfully from the old smokestack indus-
try 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 —
Reprinted with permission. All rights reserved.
renowned for its R&D that created products such as the
synthetic fiber nylon — decided to pour billions of dol-
lars into safe, environmentally friendly products.
For instance, DuPont and British food refiner Tate & Lyle
make Bio-PDO — a corn-based chemical used in cosmet-
ics, 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 social-
ly 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 drink-
ing water — charges denied by DuPont.
Two years ago, DuPont agreed to a $16 million settle-
ment 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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AS SEEN IN USA TODAY’S MONEY SECTION SEPTEMBER 7, 2007, 1B

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 share-

holders 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 com-
panies.

"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 direc-
tor at Institutional Shareholder Services (ISS), a proxy-
research firm. And a record 23% of those were with-
drawn 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 compa-
nies and weak directors and executives. Their main
weapon has been shareholder resolutions aimed at com-
panies 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 share-
holders, whose proposals on CEO pay and other hot-but-
ton 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 trad-
ed corporations can ill-afford to anger investors who
hold billions of dollars in stock.

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AS SEEN IN USA TODAY’S MONEY SECTION SEPTEMBER 7, 2007, 1B
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 seek-
ing 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 corporate-
governance, labor and environmental issues are main-
stream investment issues, not "fringe nuisance propos-
als" that surface at annual meetings, says Howard
Sherman, CEO of the GovernanceMetrics International
research firm.
"These issues have financial impact and can affect port-
folio 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-gover-
nance 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-
Reprinted with permission. All rights reserved.
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 produc-
ing shareholder value."
Businesses also argue that some labor and environmen-
tal 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 sharehold-
er 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, includ-
ing:
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% major-
ity vote.
So this year, activist shareholders — such as the United
Brotherhood of Carpenters and Joiners of America pen-
sion 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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AS SEEN IN USA TODAY’S MONEY SECTION SEPTEMBER 7, 2007, 1B
"This is absolutely unprecedented, for so many proposals
to be withdrawn," Bowie says.
Following the lead of Colgate-Palmolive, Pfizer and oth-
ers, more than 400 U.S. companies have adopted majori-
ty-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 par-
ties 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 resolu-
tions 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 dis-
cuss 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-cli-
mate resolutions were filed by Trillium Asset
Management, Calvert mutual funds, the SEIU and the
North Carolina state treasurer with energy, auto, home-
building and financial companies.
Shareholders withdrew one-third of the resolutions after
the companies — ConocoPhillips, Toll Bros. and others —
Reprinted with permission. All rights reserved.
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 com-
panies and the fiduciary duties of corporate board mem-
bers 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, start-
ing 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 com-
pany to reduce greenhouse gas emissions.
Several explosive issues loom, including a long-running
and divisive battle at the SEC over rulemaking on share-
holders' access to the proxy. Proxies, the main arsenal of
Reprinted with permission. All rights reserved.
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 dia-
logue is very helpful."
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AS SEEN IN USA TODAY’S MONEY SECTION AUGUST 20, 2007, 5B
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 sabbati-
cals. 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 compe-
tition is only going to get more intense. Sweden is a
country of 9 million people. Its big companies can't sur-
vive selling at home. Eighty percent of Skanska's busi-
ness is outside of Sweden.
Q: The trend here is going the other way, with the
Democrats taking control of Congress and in strong con-
tention for the White House. Is there pressure in
Sweden to make its business climate more American-
like?
Reprinted with permission. All rights reserved.
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 sharehold-
ers 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 oppor-
tunity — 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 cul-
ture. 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 oppo-
site. 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?
Q: Do you make less than if you ran an $18 billion com-
pany 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 signif-
icantly 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 crum-
my $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 for-
eign policy and political reasons. People don't view busi-
ness 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 every-
body how smart you are and how dumb they are. It's
human nature that people will resent that.

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 draw-
backs. 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.

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AS SEEN IN USA TODAY’S MONEY SECTION JUNE 22, 2007, 4B
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, soft-
drink 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 dis-
cussion 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 presi-
dent Al Gore will be here to speak on what advertisers
and ad agencies can do to "raise awareness of the cli-
mate crisis around the world."
Gore's seminar follows a discussion on Wednesday host-
ed 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 develop-
ment 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."
Reprinted with permission. All rights reserved.
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 alterna-
tive 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 environ-
ment. 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 prod-
ucts, according to research group Mintel.
And research shows many folks will pay more for eco-
friendly 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 environ-
ment: "greenwashing."
Page 10
AS SEEN IN USA TODAY’S MONEY SECTION JUNE 22, 2007, 4B
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 aware-
ness of global warming.
Microsoft has touted its success in reducing fuel emis-
sions, 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 lit-
tle 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 infor-
mation," 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 pan-
els, 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 exe-
cutions, by BBDO in New York, will get nearly 100% of
GE's corporate ad budget this year.
Reprinted with permission. All rights reserved.
"Ecomagination is a business initiative first and fore-
most," 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.
Page 11
 Discussion Questions:

1. Choose a company that you do business with on a regular basis. Examine their economic, social, and environ-
mental 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 mil-
lion 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 actu-
ally 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 impor-
tance 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 compa-
nies 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.

For more information, log on to www.usatodaycollege.com Page 12

 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 eco-
nomic, 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 devel-
opment. It bridges theory and practice, builds leadership skills, and supports constructive dialogue and collabora-
tion 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, opin-
ion and analysis of critical issues in the field of corporate responsibility.

For more information, log on to www.usatodaycollege.com Page 13