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Archive for the ‘government’ Category

Everything is green nowadays. It’s the talk of the town. Newspapers are full of the latest green apocalypse heading our way. Bloggers blog green left, right and center – with fonts and pictures to match. Activists are up in arms about green washing and washing our greens. Governments want to govern what green means. The celebs and stars shine their special green glow all over us. Business jockey to out-green each other. And consumers are turning green with envy when the Joneses outdo them with the latest hybrid, organic, recycled, wind powered and turtle free cup of joe.

It’s not a bad thing. Saving our planet before it burns is not a bad idea. Even if it won’t happen in the next year or 50 – depending on who you believe. Having a tree dedicated to you somewhere in the DRC ensures you a retirement spot one day. And some of the ideas even save us some money! Switching light bulbs save us money – even if we can save more by switching it off. Getting 60 MPG is not to be sneezed – especially with the high gas prices. Although most small European cars can do that on flat tires.

But not everyone cares about the changes in our climate or the validity of the latest eco-friendly product. It’s pretty much a worry of the more privileged parts of society – the rich and middle class societies. You don’t switch to CFL lightbulbs if you don’t have electricity. You don’t really care about organic food if you have to worry about where the next meal is coming from. Or worry about renewable energy if you don’t have a roof over your head. But you might become greener even if you don’t care. Governments will continue to green the things we buy. Activist will continue to put on their green campaigning hats. Business will continue to grow and make greener products. And bloggers will continue to out-green each other to be the next Big Green Voice of Authority. All of this will continue to make everything we use and buy greener than before – even if we don’t care or want it.

But green means almost nothing outside of the big markets – mostly in the West. There are bigger issues facing people in places like Burundi, Zimbabwe, Niger and Liberia. They continue to struggle to survive each day. The cheapest bidder always wins when you live off less than $1 a day. And you don’t know if there will be a tomorrow if you live in Malawi or Botswana – HIV, TB or malaria can strike at any time. And who cares about the rainforest if you could be killed by a landmine in Angola or a warlord in the Democratic Republic of Congo. Or care about sustainable farming when you have no food in Somalia.

The number one aim is to survive. If that means eating the last Rhino or chopping down the last tree for firewood – then so be it. Planning for day 2 comes when you manage to get past the survival stage. But this doesn’t mean you are going to start farming in a sustainable way. Or buy renewable energy for your manufacturing plants. Nope, you are now just planning for day 2 – securing tomorrow and competing with your neighbor. India, for example, continues to argue that they will start thinking of their impact on the climate once they are allowed to create as much trash per capita as the US – read: ‘you stuffed up your environment to create wealth, why can’t we?’ The alternative, of course, would be to pay the developing countries to play the game. We know where that debate will end up. They can’t solve trade and aid – imagine eco-aid for sustainability at a large enough global scale…

It is only when you don’t have to worry about might happen to you tomorrow – food, security, health, housing, job etc – that you can start worrying about tomorrow itself. Green debates will remain a rich and western debate and concern – unless we start dealing with these more immediate concerns that the majority of the world population still face day after day.

It doesn’t mean it is right. It’s just the way the world rolls. We can’t talk about sustainability without looking at dealing with poverty, diseases and the quest for survival so many in Africa and elsewhere struggles with each day. We must balance all three pillars of CSR and sustainability to make it work – economic, environment AND social. So often, and too easily, we forget about that third pillar. It’s three pillars to help us focus but it is one single strategy when we implement.

And this is where business plays such a crucial role. They can create and deliver the products to deal with the diseases and hunger, they can advocate and lobby for the political changes needed, and they can invest in countries who need the economic lift and hope for a better future. Governments will play the political game, activists will be crucial in highlighting the problems and help run programs on the ground. But they can’t create wealth, they can only fight poverty. Each one plays a key role. Governments provide the supporting framework, NGOs fight poverty and deliver during these emergencies and business (large and small – multinational and the woman selling fruits in the market) grows the economy to bring a sliver of hope. And in this hope lies the future of sustainability. But we are not there yet.

In the meantime, newspapers will chop down trees to print their green stories, bloggers will use computers and networks created and supported by nonrenewable energy and conflict minerals, activist will spread the word flying all over the world – and push up their emission count, governments will continue to make war over oil, celebs and stars will drive their stretch limos and live in their big houses, business will continue to confuse eco-friendlier with eco-friendly, and consumers… well, they’ll continue to buy what they want. Green or not.

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Don’t know if you’ve noticed the bit of oil in the Mexican Gulf. Bit of an issue for BP and the oil industry in general. I think enough is being said about the oil spill and the responsibility of companies by the experts – you really don’t need me to add another opinion to this. However, it does remind me that almost every company has an oil spill waiting to happen.

Every company has a big issue they face. Some have more than one. For the oil industry it is price, human rights, sourcing location and environmental impact. For the pharmaceutical industry it is price, intellectual property and access. For food companies – sourcing practices and obesity. Car manufacturers face safety issues. Clothing and show companies know that people are always looking at the working conditions in those far-flung places where their goods are made. Banks… Where do I start….

The point is that all companies will face these issues. It is driven by multiple factors – what is material to your company and what activists (NGO types or investors) highlight and where people want change in behaviour. What’s your biggest issue? Are you even aware of what it is?

There are other big issues that are less well-known within the broader public or even amongst activists. The skeletons in your cupboard. Most companies have these. Those issues you know you where are vulnerable but no one is looking at it at the moment. For instance, people focus on the working conditions in clothing and footwear. We are all aware of it and all responsible companies are trying to do something about it. But tell me, do you use leather? Few people know the way leather gets from cow to shoe. The tanning and dyeing are not something most people think about too much. It’s leather – how bad can it be? I’m lucky that I worked with the footwear unions and business in South Africa for a while. It gave me a bit of first-hand experience. Just go and have a look at how the huge quantities of leather needed for your shoes and clothes are tanned and then dyed. Not a pretty sight… But it’s out there in the middle of nowhere and no one of note campaigning on this. And maybe it isn’t even such a huge issue when looking at the broader impact of companies. But it’s out there – as visible as an oil spill for anyone looking.

It does not have to be the biggest impact – it just needs to be the most visible impact. You think the oil spill in the Mexican Gulf is the worst oil spill ever? Think again. It’s just the worst oil spill in the US and developed world. Oil spills happen daily – we just don’t see it every day because we can’t or don’t want to visit some of the places where our oil is secured from.

So the question for business to ask themselves is how far am I from a disaster hitting me? What is the disaster waiting to happen and will anyone notice? And what can I do now that makes sense. Companies can’t fight every potential disaster – No more than what the Average Joe can prevent every single thing that might go wrong in their day. Things happen no matter how much we try to prevent it. We plan and hope for the best. It is part of living. If we didn’t do that we will all stay at home and eat apples – too scared of being in a car crash, hit by a natural disaster or eat crap and die from obesity. Life is assessing the risks and doing what we think is best. Most of the time it pays off and sometimes it doesn’t. That’s life. But we better be prepared to face life with careful planning and open eyes.

It’s not that companies aren’t trying to do their best to prevent disasters. BP and the companies they worked with did not want this to happen. It just happened. Unplanned.

That’s the challenge – unplanned. What can we do to prevent the disaster from happening? Are you ready? Or ready enough? The reality is that we can’t live a business life without a disaster but the challenge back is that many businesses just do not prepare well enough to deal with disasters. Risk is one thing. Cost and risk combined generally brings us that little bit closer to disasters.

Let’s look at the oil disaster again. Some are arguing that the lack of a safeguard device resulted in this oil spill becoming the disaster it is today. The WSJ (and many others) reported that the Leaking Oil Well Lacked (a) Safeguard Device. I won’t go into the details of what this device does as I am no oil expert, but the argument goes that Brazil and Norway requires oil companies to have this device in place as it chokes off the oil flow in case of an emergency. The US doesn’t require this – and most countries don’t. The oil industry lobbied hard to not have this requirement. The main reason? It adds $500,000 to cost.

It’s easy to look at it now and say that this decision by the US government (under President Bush) and the oil industry was a major mistake. However, responsible companies do not wait to be regulated into best practices – they lead. Without naming the company, I worked with a US company who adopted best practices as required in Australia because they believed it was the best thing to do for the company – and the most sustainable. Responsible companies have to manage the costs that comes with taking in best practices but one great disaster substantially undermines the argument of “too much costs”. How much do you think one single big disaster will cost your company? It’s always difficult to judge the effectiveness and cost argument when nothing goes wrong when you prepared for it though.

But I want to take this one step further – are you truly global?

We talk about those large companies as global because they work across the globe. But the truth is that few companies really are global in practice. They might source from or sell to the globe but they don’t always have the required global systems in place. A responsible company will ensure that their responsibility practices and policies are global. You take what is best in the market and make that global. Not only for preventing oil spills but also when it comes to hiring practices, recognizing human rights, transparency, environmental impact etc. Responsible companies do not go to the “what is legally required” level – they go to “what is required” level. Required by investors, stakeholders, employees and society as a whole. BP should ask themselves where the valve falls. Pharmaceuticals should ask where access or intellectual property rights fall. Food companies should ask where obesity, advertising to children, nutritional information etc falls. Clothing and footwear manufacturers should ask where working conditions, human rights and dyeing falls. Every company should have a heart-to-heart and ask themselves where their major potential disaster(s) fall.

…And companies are still surprised why consumers and activists are tired of green washing? It’s because they know that you are one wrong risk assessment away from a disaster – in the open or in the closet.

What is your oil spill waiting to happen? And what are you doing about it?

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No one likes taxes and we all pretty much find news ways to complain about our tax burden. Both left and right have their own issues. The left complains about too much taxes going to subsidize big companies or the military and too little going to social needs such as health care or education. The right complains that money going to government provided health care or unemployment benefits pushes up individual taxes and the burden on those who work. Where the money goes is just politics. What they do have in common is their universal dislike of taxes. And there is one tax that they all hate most…

Those hidden taxes. The little bits of taxes you pay each and every day. Taxes on stuff you buy. Taxes when you die. Taxes to fill up your car. Taxes to recycle. Taxes to use the park. Taxes to blow your nose. One hidden tax after the other. You don’t see it or notice it too much because there are so many of them hidden away in each and every corner. You do something  and you pay taxes. Little bit by little bit. But they are always there. Somewhere.

No wonder companies (and people) complain that these hidden taxes are just too much. They want transparency. They want to know what they are paying and when they are paying it in a more open and transparent way. Why not just have a flat rate on everything so we can know what we pay and when we pay it. They are just asking for the basic ingredient of CSR – transparency.

(Of course the underlying reason for this call is not only to have taxes be consistent and transparent but to also have a single source they can attack.)

Companies are especially vocal about their opposition to these hidden taxes. They complain that it puts them at a disadvantage over their foreign competitors. The odd thing is that all companies complain about this no matter where they are based… And they complain that they just have to pass on all these hidden tax costs to the consumer. A good way to get the average Joe on your side – tell them it isn’t your fault that you are charging them more than before… you are just doing what the government forces you to do, right?

Bad argument that one. Any cost a company takes on will be passed on to the consumer no matter what the reason or source of that cost might be. Pharmaceutical companies pass on the cost of finding new drugs. It doesn’t matter if the drug fails or not – you get charged for the failures. Oil companies pass on the cost of searching for more oil. You pay for the investment they make. All that makes perfect sense. It’s what companies do to find something new to sell us or keep servicing our thirst for new and more products. It’s business.

But companies also pass on failure that can be put squarely at their own feet. Years of bad decision-making at US car manufacturers? Guess who pays? Big oil spills? Guess who pays? A golden handshake to a failed CEO? Guess who pays? The consumer do. Companies just pass on those costs to the consumer in the same way they pass on every other cost. Companies will not make decisions that will pull them down. And rightly so. Companies target their bottom line and know what margins they need to keep investors happy. And if these margins get squeezed then they make “price adjustments” to cover their bases. I’m not saying there is anything wrong with this. That’s just how business works. That’s business life. But let’s be transparent about those costs. Business do not only pass on taxes to consumers. They pass on every single cost to the consumer. Until the consumer kicks back when the benefit of the product is surpassed by the cost they have to pay – then the business fires a few people and make a product or service “adjustment” or creates a new product that offer more value to that consumer. But that doesn’t happen as often though. Consumers tend to take a lot of punishment before they start kicking back.

That brings me to the hidden taxes that companies complain about but that they are more than happy to implement themselves. An article in the NY Times highlighted how hotels are expected to substantially increase surcharges in the coming year. Oh we know about some of those surcharges the same way we know about some of the hidden taxes – internet connection in your hotel room for example. But some are hidden away or in fine print that most travelers don’t know about and hardly have time to look into while on holiday or a busy business trip. For example, I don’t use the minibar because of the stupid prices they charge. But I didn’t know that some hotels even charge you a minibar restocking fee of $2.95 to $5.95 a day, once the first item is removed. Not only do they rip you off with the high prices but they charge you an additional fee to restock! It’s like complaining about high taxes and then being charged a few more dollars for paying those same taxes.

Of course it is not only hotels that do this. Almost every single company has these in one way or another. Pay up for your luggage please. Want to use the toilet? No problem – pay up. Want to use the ATM to pay for something? Here is another charge if you don’t mind. Oh, you actually wanted to get paid if you are sick? Some fine print in your health care benefits says you have to pay more. Want to access your money at the bank? Heck, they have different ways to charge you no matter what you do – teller, ATM or check. More taxes. More hidden taxes. These are the easy ones. The less well hidden taxes. The ones we can sniff out because some sparky manage to get upset enough about it when they had nothing else to do but go through the fine print.

I wonder how many hidden taxes are out there practiced by companies each and every single day. The little bits of fine print you know you can’t read because it isn’t written in plain English or a font large enough to read with your glasses on or you don’t have 72 free hours to spend reading the pages and pages of documents that comes with almost every single product and service you buy nowadays. They are out there. We just don’t know where or how much.

So… To those business who complain about hidden taxes. Please stop. Practice what you preach and then we can talk. Most governments are not transparent and neither are most companies when it comes to these hidden taxes. It’s life and the consumer will continue to pay. Let the consumer complain if they want. But please make sure you are “hidden taxes free” before you start complaining about government taxes – especially hidden taxes. Responsible companies are transparent about all the costs consumers pay – no hidden costs or taxes allowed. Make it simple. Make it transparent. Write it in BIG LETTERS and tell each consumer about these charges BEFORE charging them. Why don’t you write a document about your own hidden taxes so consumers can read this the way you read tax laws? Actually don’t because no average person can ever understand tax laws. Be better than the government and make it a short, simple and easily understood document and then we can talk. Transparency is not only about making information easily available. It is also making it easy to understand. And ensuring that people know about it. That’s what a responsible company will do. Or at least what they should do.

Maybe we can all do what the rich individuals and big companies do – find tax havens. Maybe we can find a few companies out there who won’t have these hidden taxes. Maybe then we can talk about transparency. But I won’t hold my breath looking for those companies. It would be like holding my breath for a government somewhere who will actually get rid of the hidden taxes. And we know that ain’t happening soon. No matter who is in charge…

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