CSR: does size matter?

The BBC reported on Thursday a massive misleading sales in the UK. Nearly 15,000 people who registered with Groupola , a group buying website, to purchase an iPhone 4, “were not told that only eight phones were on sale at the discount price of £99”.

Most people were left disappointed, but the business consequently had thousands more people’s details available to it when sending out daily e-mail alerts. The good news is that the company, run by Marcko Media, has been censured by the UK Office of Fair Trading (OFT), and consequently had to apologise and said those responsible no longer worked there. The same investigation also revealed that an employee of the group, pretending to be a consumer, had posted on social media positive feedback and comments about the “bargain”.

Markco Media, created in 2006, is a startup company, that apparently doesn’t have the skills, the experience, the idea or more likely the strategic objective to develop responsible business practices. I’ve met many similar companies, especially startup companies. To be fair with them, the problem was not necessarily that they didn’t want to engage in responsible business practices but they simply didn’t know “how to” or failed to see the importance or ROI to do so. Most of them didn’t consider Corporate Social Responsibility a strategic priority, seeing it as a domain reserved to large companies only, that seem to be more under public scrutiny anyway. The recent CSR law in Spain, that makes CSR reporting “mandatory” for companies with more than 1000 employees, sends unfortunately the wrong message. In my opinion, CSR is not just for large corporations. Developing responsible business practices and taking in consideration stakeholder concerns and interests in the overall strategy is essential to any business.

So, what do you think? When it comes about CSR, does size matter?

Sustainability Awards: Doctor Knight and Mister Eye?

Dr C. Knight during the day. Mr. P. Eye at night? The Finnish energy corporation Neste Oil has received simultaneously, two very different distinctions. One for its “Irresponsible Corporate Behavior”, as a winner of the Public Eye Award, a “contest” organized by Berne Declaration and Greenpeace, and dedicated to highlighting the “most evil corporation of the year” from six candidates chosen by the organizers. The other, as a privileged member of the 100 World’s Most Sustainable Companies list established by the Canadian magazine Corporate Knights that “worked with a research firm to winnow down its list of publicly traded companies from 3,000 to 300”, based on financial performance and other criteria.

According to the Public Eye Award organizers, “Within the next two years the Finnish energy corporation Neste Oil is on track to become the number one buyer of palm oil and the world’s largest producer of biofuels”. Even today, they add, “under the misleading label “Neste Green Diesel”, the company sells “biodiesel” made from palm oil throughout Europe. IOI, Neste’s main supplier, has doubled its palm oil concessions as Neste is expanding its productive capacity in Rotterdam and Singapore”. The organizers explain that this a really bad behaviour because, and they’re absolutely right about that, “vast expanses of precious rainforest are sacrificed to the growing European demand for palm oil”. More importantly this production “requires chemicals that poison workers, villages, soil, water, fauna, and flora. The transformation of rainforests into plantations also destroys the habitats of endangered species such as the orangutan.”

In a public statement Neste Oil says it is “disappointed in the outcome of the Public Eye Award announced today and believes that it does not reflect the true nature of the situation. The company adds that it only buys “palm oil produced according to sustainable principles with a verifiable origin that is available” and reminds that it has” received extensive positive international recognition” for its “responsible approach from independent expert bodies in a number of reviews and indexes”. The most recent example of this being the Forest Footprint Disclosure 2010 Report published recently, in which” Neste Oil was ranked as the best oil company in terms of its forest footprint reporting for the second time”.

As for the 100 World’s Most Sustainable Companies list, Corporate Knight “tapped intelligence from the world’s largest sustainability research alliance to isolate the top ten per cent of companies from a universe of 3000 global stocks, which were then transparently ranked based on 10 verified indicators” such as Leadership Diversity, Carbon, Water and Safety productivity. The magazine also mentions that some “controversy research was incorporated into its assessment of each company to provide risk mitigation against companies with severe controversies that could be deleterious to share valuation.”

I’m not sure if controversy could be avoided regarding such a very sensitive topic. On the one hand, the risk is that the general public loses interest in those rankings and awards, and unfortunately, in sustainability in general, because of a lack of credibility of public and private organisms that monitor its execution.  But on the other end, public debate, transparency and critical thinking can help advance the cause of sustainability, avoid greenwash and window-dressing and ensure that companies achieving positive results on some specific indicators stop addressing the concerns of other legitimate stakeholders.