BUSINESS WATCH

Food Is Going to the Dogs

noreply@blogger.com (Jonathan Cohen) — Tue, 01 May 2007 03:37:00 +0000

A staple of nonprofit fundraising appeals for years has been the amount of money Americans spend on pet food compared to the notably smaller amount one is asked to contribute to said cause.

Americans love their pets. They spend money on their pets as if they were kids. Pet food alone is a $14 billion a year industry. In fact, "For the baby boomers, the pets have now become the kids, because people are treating them that way," according to a story in the Boston Herald. "We've seen this huge amount of money being spent on their pets."

So, it's not surprising that a major story has emerged of pet food from China that killed furry loved ones in homes across America.

Add a sense of helplessness and fear (American Food Supply at Risk -- April 29) after the toxic food becomes human (Tainted Pet Food Linked to Ind. Chickens – April 30), mix in a touch of greed to the scandal (Pet Food Officer Sold Stock Before Recall -- April 11), and the makings for a major story are in place, the kind of a story that most any reader can relate to.

This story taps into the dark and deeply personal memory of losing a pet that any pet lover has experienced, probably in the course of their formative childhood years.

China’s sheer lack of quality control and corruption is of course the main story here. Consider the huge trade surplus involved – China had about a $150 billion surplus with the U.S. and replaced it as the largest exporter in the world in 2006. The sheer volume of products from China that enter the United States at every level of the supply chain promises that the pet food scandal is a story, dare I say … with legs.

Green is the New Black

noreply@blogger.com (Jonathan Cohen) — Sat, 17 Feb 2007 21:33:00 +0000

Climate change has gone mainstream. How to tell?

#1 “Let’s Talk About Climate Change” full page ads have been appearing in the Washington Post by…Exxon. When THE BIGGEST climate change denier nonchalantly changes tact to engage the issue on its own terms rather than insisting it doesn’t exist, they have conceded the fight. The vice president for public affairs of the world's largest publicly traded oil company, Kenneth P. Cohen (no relation), said that, the company has never denied the existence of climate change. No, they have only heavily funded those that do.

#2 Bush mentioned it for “the first time” in six years in office in a State of the Union address.

#3 Lawmakers in the U.S. finally seem poised to pass legislation, which business groups may support out of fear of a patchwork of regulations in the absence of a uniform national approach. Also, a group of global lawmakers signed a resolution Thursday urging a new agreement limiting greenhouse gas emissions.

And in other cultural indicators:

#4 International benefit concerts with a cause that once covered famine aid for Africa, farmers, and poverty, now will tackle climate change. "Save Our Selves" -- SOS will be held "on 7/7/07 across all seven continents" aiming to trigger an international movement to combat global warming – with proceeds going to Gore’s foundation, btw.

#5 The main classic rock station in the Washington DC area, 94.7 FM, has banked that green is good, to paraphrase Gordon Gekko in the movie Wall Street, with a new name – The Globe, and mission: “We want to be a part of the solution.” Their web site lists the following among their top 12 priorities:

1. THE GLOBE - We All share and have a vested interest in The Globe.

3. THINK GLOBALLY, ACT LOCALLY - As a Local Radio Station, we'll support our community...because we live here too.

Of course, they also hawk global positioning gadgets with the pitch that you can find the nearest place to recycle your garbage.

Exxon Mobil Posts Largest U.S. Profit Ever -- Again

noreply@blogger.com (Jonathan Cohen) — Mon, 05 Feb 2007 04:43:00 +0000

Does a company with the largest annual profit ever by a U.S. company -- $39.5 billion in 2006, which exceeded its own previous record of $36.13 billion set in 2005, really need a tax break?

Trans Fat Is On A Roll

noreply@blogger.com (Jonathan Cohen) — Wed, 31 Jan 2007 03:45:00 +0000

McDonald’s the Latest to Fry Trans Fats

A Top Ten (largely ) Trans Fat Free List:

The LARGEST: The poster child for fast food fat, McDonald’s, announced January 29 that it will follow the lead of other big chains that are also removing trans fat from cooking oils. The biggest fast food chain has been under the gun after revealing that its French fries contain a third more trans fats than it previously knew, and breaking its 2002 commitment to eliminate artificial trans fat from its cooking oil.

2^nd LARGEST restaurant chain: KFC pledged to largely eliminate trans fat from most of their foods by next spring

4^th LARGEST restaurant chain: Pizza Hut “claims it’s working on getting rid of trans fat (it’s nearly there, partly because pizzas have little or none)”

5^th LARGEST restaurant chain: Wendy’s switched to trans-free frying oils earlier this year

6^th LARGEST restaurant chain: "Subway never had much to begin with, but got trans fat out of its cookies this year"

7^th LARGEST restaurant chain: Taco Bell pledged to largely eliminate trans fat from most of their foods by next spring

8^th LARGEST restaurant chain: Domino’s Pizza is mostly trans-fat-free, “though a ‘garlic dipping sauce’ with seven grams of trans fat is made with partially hydrogenated oil”

9^th LARGEST restaurant chain: "Starbucks removed trans fat from the one drink that had it and has announced that trans fat will be kept out of seasonal baked goods, though it remains—in high amounts—in some pastries in many stores. Starbucks uses regional bakers whose recipes may vary"

Other large restaurant chains that have switched or are switching to trans-fat-free vegetable oil for deep frying: Arby’s, Chili’s, Denny’s, Red Lobster, Olive Garden, Ruby Tuesday and the Macaroni Grill.

Restaurants did not have labeling as an incentive to change, according to the Center for Science in the Public Interest, so they’ve needed other incentives, such as “a lawsuit here, a municipal phase-out proposal there.”

BIG Cities:

Los Angeles: Meanwhile today, LA officials reached agreement today with the LA chapter of the California Restaurant Association to voluntarily phase out the substance within 18 months, after a failed attempt to ban it altogether. The association only has a few thousand members out of more than 34,000 restaurants in the county, so its full impact remains to be seen.

New York City: History was made on December 5^th when the suddenly healthy sounding Big Apple became the first U.S. jurisdiction to ban artificial trans fat from restaurants by July 1, 2008. Support for the ban came from numerous radical groups, such as the American Medical Association, American College of Cardiology, American Cancer Society, American Diabetes Association, American Academy of Pediatrics, Columbia University Medical Center, Harvard University, and New York University.

Calgary: The head of the Calgary Health Region, Jack Davis, told the Calgary Sun newspaper the region is planning to chop trans fat from city menus, which would make it the first Canadian city to ban the processed substance.

Lest you think the U.S. is leading on this count, Denmark virtually banned artificial trans fat two years ago.

In Case You Missed It in 2006

noreply@blogger.com (Jonathan Cohen) — Mon, 01 Jan 2007 01:47:00 +0000

For those getting nostalgic about the past year, here’s a sampling of some of the big stories, which include:

Russia: 15 years – almost to the day -- after the fall of the Soviet Union, Russia and Vladimir Putin strong-armed Royal Dutch Shell into giving up control of that country’s single largest foreign investment, the Sakhalin-2 natural gas and oil project to the state natural gas monopoly Gazprom on December 22. Other partners in the project, Mitsui and Mitsubishi, acceded to halving their control in the project. Vice President Dick Cheney leveled the harshest criticism of the Kremlin by a world leader back in May when he accused it of using oil and gas as “tools of intimidation or blackmail.”

Food:

The U.S. Food and Drug Administration approved milk and meat from cloned animals for consumption by consumers, although it did not approve labeling of such food, with which surveys show more than 60 percent of consumers are uncomfortable. Interestingly, a key opponent of such foods, which would take some years to get into the commercial food supply, is a coalition of powerful food companies, led by the International Dairy Foods Association, which represents such large, brand-sensitive companies as Kraft Foods, Dannon, General Mills and Nestlé USA, who are concerned that the public will reject Dolly-the-Lamb chops (the Washington Post's line, not mine).

Trans-Fat: New York City adopted the nation’s first major municipal ban on the use of artificial trans fats in restaurant cooking on December 5, which the New York Times calls "a move that would radically transform the way food is prepared in thousands of restaurants, from McDonald’s to fashionable bistros to Chinese take-outs." Such moves were seen elsewhere across the country as Darden Restaurants, for example, switched to trans-far-free frying oil at all of its Red Lobster and Olive Garden chain restaurants.

Advertising (AKA Food Part 2):

The Walt Disney company announced on October 17 that “it plans to change its policy and use its (film and television) characters to market foods to children only for products that meet certain nutritional guidelines,” i.e. foods in which fat does not exceed 30 percent of calories in main dishes, saturated fat doesn’t exceed 10 percent of calories, and added sugar doesn’t exceed 10 percent of calories for main and side dishes and 25 percent for snacks.” This covers 60 percent of Disney-licensed products, although it does not include “special-occasion sweets such as birthday cakes and seasonal candy.” “Disney is also changing children's meals at its theme parks by including water or low-fat, 100 percent fruit juice with side dishes such as applesauce or carrots in place of soft drinks and french fries. Parents who want soda or fries will have to request them.” Interestingly, “Disney test-marketed 20,000 of the more healthful meals and found that as many as 90 percent of parents stuck with the more nutritious option.” The new initiative evidently did not include radio or television advertising on its corporate sister company the ABC television cable networks.

The William J. Clinton Foundation and the American Heart Association announced a voluntary agreement to follow guidelines for snacks and side items sold in schools with five major junk food manufacturers, Campbell Soup Company, Dannon, Kraft Foods, Mars and PepsiCo, on October 9 that calls for promoting “nutrient-rich foods, fat-free and low-fat dairy products and place limits on calories, fat, saturated fat, trans fat, sugar and sodium,” with details not clearly spelled out.

From the Do It for the Kids File, The R.J. Reynolds Tobacco Company and the Attorneys General of 38 states agreed to a domestic ban on its line of flavored cigarettes, which entailed a stop to cigarette names that allude to candy, fruit, desserts or alcoholic beverages, and avoid using scented promotional material, including scratch-and-sniff samples.

Renewable Energy: New York University announced the largest purchase of wind power, 118,000,000 kilowatt-hours, by any U.S. college or university, according to the Environmental Protection Agency’s Green Power Partnership Program. It will also be the largest purchase of wind power by any institution in NYC and the 11th largest purchase nationally, according to The Villager newspaper.

HP Surveillance: See blog post on October 2, Paranoid: Spying, the Hot New Trend

BP's Long Fall: See blog post on September 11, When A "Good" Company Goes Bad

Paranoid: Spying, the Hot New Trend

noreply@blogger.com (Jonathan Cohen) — Tue, 03 Oct 2006 03:40:00 +0000

HP, or Hardly Private, makes one wonder what’s going on inside of the boardroom these days. “After reading of the lengths to which board Chairwoman Patricia Dunn and her squad of investigators went to find the source of board leaks who hasn't thought twice about what they say on the phone or in an e-mail—or asked, am I being watched?” Business Week asks in an Oct. 2 article cleverly entitled: Spy vs. Spy: Corporate Espionage

Radical NGOs are afoot – prepare for them before they prepare for you (“Keeping Ahead of Activists is a Dog-Eat-Dog World”), says the new Oct. 2 issue of PR News.

The IRS could be watching, as Glaxo SmithKline found out when they copped to the BIGGEST U.S. tax settlement ever of $3.4 BILLION on Sept. 11.

Even judges are not immune, as their previously secret corporate sponsored junkets have been changed by the Judicial Conference as of Sept. 19 (“New Rules Mean Shift Toward Accountability for Judiciary") According to the new rules judges are now “barred from accepting reimbursement for seminars hosted by organizations that do not publicly disclose their funding sources, speakers' names, and other information,” and “judges will have to publicly disclose their attendance (on junkets) on their court's Web site within 30 days.”

And you too could join in on the fun, albeit in a wholesome all-American way. Although not usually known for leading trends, the federal government of course has led the pack in this department as recent legislation suggests that I won’t get into here, but I’m actually talking about the new web site listing fed grants greater than $25G – the vegetarian-friendly Pork Tracker, which is required by the Federal Funding Accountability & Transparency Act of Sept. 26, 2006.

Follow the money trail in the comfort of your own home, without pretexting even.

When A "Good" Company Goes Bad

noreply@blogger.com (Jonathan Cohen) — Mon, 11 Sep 2006 16:30:00 +0000

How much rope does a company with a good Corporate Social Responsibility (CSR) record get when they screw up?

Specifically, how much leeway does BP get for its atrocious record recently (See Timeline below) because of its groundbreaking role as the first oil company to publicly acknowledge global warming and the role of fossil fuels in it?

Do Exxon Mobil, Chevron, and Petronas get a free pass because they have not made the same effort? Or in fact actively fought such efforts, as in the case of the former (See Bloomberg, May 16, “Exxon-Funded Group to Run TV Ads Questioning Climate Change”)?

Is it possible for a non-governmental organization (NGO) to criticize one aspect of a transnational corporation’s conduct and at the same time praise another … without losing mission focus or support?

When a company promises to be socially responsible and violates that promise -- as with Google admitting censorship of searches for terms antithetical to the Chinese government violated its slogan Don’t Be Evil, it engenders greater disappointment than if it had not made the promise at all. BP is experiencing this, which brings new meaning to the term Googled.

PERSONAL ANECDOTE:
The first multi-stakeholder event I ever organized with NGOs, business, the U.S. and the United Nations took place in 1997 around the Kyoto Climate Change Conference and featured BP’s then-Vice President for External Affairs. The U.S. had not taken a leadership role at that point, while BP was out in front, having publicly left the deniers in the industry AstroTurf* front group named the Global Climate Coalition. During the Q&A, a lefty NGO commented “I never thought I would say this, but BP’s position is more progressive than the U.S. government’s.” It was true at the time.

BP TIMELINE:

September 2006 – BP executives get excoriated by elected officials and apologize during an appearance before a Congressional Committee hearing under oath, with one taking the 5th amendment against self-incrimination

August 2006 - Shut down the largest oil field in the United States, Prudhoe Bay, and its 400,000 barrels a day of production

June 2006 - U.S. Commodity Futures Trading Commission brings charges of price-fixing

April 2006 - U.S. Labor Department fined BP $2.4 million for safety violations at its Ohio refinery

March 2006 – BP’s Exploration Alaska subsidiary spilled more than 200,000 gallons of crude oil near Prudhoe Bay, the largest North Slope spill ever.

September 2005 - OSHA Fines BP Products North America More Than $21 Million Following Texas City Explosion

March 2005 - Explosion at its Texas City, Texas, plant claimed the lives of 15 workers and injured more than 170 others

*AstroTurf: A warm and fuzzy sounding nonprofit front group for industry that sounds like it has grassroots support for an environmental cause, i.e. the now disbanded Global Climate Coalition, which represented oil companies and campaigned against the validity of climate change.

The Small-Mart Revolution Hits D.C.

noreply@blogger.com (Jonathan Cohen) — Thu, 03 Aug 2006 06:42:00 +0000

The Small-Mart Revolution: How Local Businesses Are Beating the Global Competition
By Michael H. Shuman -- Appearance at the Washington book store institution Politics & Prose.

Appearing in the first of a 30 city book tour that will feature events organized by local businesses, author Michael Shuman argues in a new book that despite the endless media coverage of multinational conglomerates, local businesses give more to charity, adapt more easily to rising labor and environmental standards, and produce more wealth for a community. They also spend more locally, thereby increasing community income and creating wealth and jobs.

A 2002 study by the consultancy Civic Economics in Austin, TX found that every $100 in consumer spending at a local merchant vs. a chain retailer yielded three times the local economic impact for three reasons:

1. Local merchants spent a much larger portion of revenue on local labor;
2. Local merchants kept their modest profits in the local economy, bought services locally, and created stability by not moving;
3. Local merchants provided strong support for local producers, created a greater local economic impact/multiplier effect, attracted innovation, and even tourists – who saw something besides chains from the mall at home.

Michael said a strong local economy results in higher social well-being and political participation. By contrast, he pointed to the sheer lack of investment occurring in local economies by state pension funds and individuals, as opposed to the $100s of millions of subsidies doled out to large businesses.

On the positive side, the high price of oil was held as a boon to local businesses, which can compete more effectively with products from China, for example, as a result of higher transportation costs, while also serving as an incentive for more walkable, “Smart Growth,” communities.

Pointedly, Michael said that a localized, small business led economy was not anti-globalization. He cited the example of Tru-Value hardware stores as a demonstration of a network of producers succeeding in generating economies of scale while being rooted locally. He is currently working with a local chamber of commerce to sell through eBay and take advantage of large markets, rather than try and do away with them.

Michael claimed a position in between left and right. Criticism of Maine subsidizing non-local banking and manufacturing businesses by 40% was cited as an example of economic sense, rather than politics.

Michael touted the virtues of local business networks rooted in communities, including a four year old umbrella of such networks called the Business Alliance for Local Living Economies (BALLE). Four years ago I participated in the first BALLE conference with Michael and some 35 others after co-founding and chairing an affiliate in New York City. Today, BALLE has grown to 60 affiliates representing 10,000 businesses.

If Michael had one recurring theme, it was the challenge of the inevitability of local economic decline, or death by chains. As the floods of Hurricane Katrina resulted in the declared obituary of New Orleans as a viable community and the subsequent fight to keep the Crescent City’s mojo intact, so goes the effort to keep the essence of local history, culture, family and sense of place that attracts.

It Isn’t Easy Being Green – for Corporate Advertising

noreply@blogger.com (Jonathan Cohen) — Thu, 27 Jul 2006 02:05:00 +0000

A new study by the branding firm Landor Associates breaks down the percentage of the general population that care about the environment, using three categories:

Not Green Interested (58%) – Don’t care about environmentally friendly practices, such as organic ingredients
Green Interested (25%) - Concerned about the environment, but not active in its defense
Green Motivated (17%) – Consider it very important for a company to be green, and base purchase decisions on whether or not a brand reflects green behavior in its packaging, ingredients and corporate actions

What the study lacks, however, is context. Are these numbers growing in comparison to say five years ago? Certainly the organic food industry has risen dramatically in recent years to the point where Wal-Mart is now getting in on the action (See May 17^th post: Big Box Organic – You Are What You Eat).

An accompanying article on BrandWeek magazine’s web site frames the study in the context of an increase in green marketing – "It is easy to say you are green, but consumers are skeptical. And because everyone wants to jump on the green bandwagon, all of a sudden it is noisy in this space, and it is hard to break through."

Among the corporate marketing efforts in recent months trying to reach the 58% who don’t care and then some, according to BrandWeek, are Dow Chemical’s "Human Element" campaign, Shell Oil’s $30 million marketing campaign in June and General Electric’s continued "Ecomagination" effort.

What the study also does not take into account is the fact that the number of active people concerning any issue, whether progressive or conservative, tends to be small relative to the overall population. When I worked campaigned door-to-door on environmental issues I would ask the question “Are you interested in clean water?” Of course people said yes. The point being that just because someone in a survey says they are Not Green Interested doesn’t mean they aren’t interested in environmental issues. The phrasing of survey questions, which are not posted, goes a long way toward understanding responses as well.

Interestingly, even though respondents had trouble identifying what it means for a corporation to be green, and 2 out of 3 consumers couldn’t name a green brand, brands that simply supported environmental organizations or causes rather than incorporating green practices did not receive recognition as being "Green."

The article went on to say that “Branding experts consider green marketing to be especially tricky because the public seems poised to accuse disingenuous companies of ‘greenwashing,’” which means companies that claim to be green but in fact are not.

Technorati Profile

Bill (Gates), Beer, Blogs (on Lay’s Escape) and School Bus Ads

noreply@blogger.com (Jonathan Cohen) — Tue, 18 Jul 2006 05:55:00 +0000

Search "Microsoft EU fine" to find a story about the huge punishment against the tech giant and you might mistakenly click on a story from March 25, 2004 that “The European Union has found Microsoft guilty of abusing the 'near-monopoly' of its Windows PC operating system and fined it a record 497 million euros ($613 million).”

Of course, the current story this week reported that the European Union “levied a second massive fine — $357 million — on Microsoft and threatened greater penalties (3 million euros, or $3.82 million, per day beginning July 31) in the future unless the world’s largest software company obeys the 2004 antitrust order."

This speaks to the point in my July 3rd blog post that philanthropy is wonderful -- as in Gates' move to work full time on his foundation and Warren Buffett’s entrusting him with the historic $31 billion gift, but the world’s richest man should not leave his social responsibility at the door when he goes to work.

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On a lighter note, want to drink beer guilt-free? See “Sales of organic beers start to hop”

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Finding yourself disquieted over Ken Lay’s punishment-robbing death before his sentencing? Perhaps a scan of the blogsphere’s reaction (One quote: "I wanna see the body") will help.

In other Enron related news:

Merrill Lynch agreed to pay Enron $29.5 million to settle its portion of a lawsuit filed against 10 banks accused of failing to prevent the energy company's collapse.

Voting is still open in the Enron poll, although views may have been skewed be recent events.

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HAVE YOU HEARD? BusRadio, a Massachusetts company, is installing radios in school buses, which will naturally air advertisements along with music to a captive audience of impressionable children. The company says it will reach over 100,000 children in MA alone this fall, and has signed contracts with districts in CA, NY, PA and IL as well. Next year, it plans to reach over a million children, and to grow from there. The teen and tween kids will hear music, patter, and eight minutes of ads per hour to start. This follows on the American tradition of advertisements in classrooms in exchange for televisions and programming from the company Channel One, which now reaches 30 percent of teenagers in the U.S.

Evidently the folks that brought you BusRadio also have a company called Cover Concepts that distributes “free” book covers to schools that happen to have ads for McDonald’s, Nike, and other national brands that are used by 30 million kids in 43,000 U.S. public schools.

In response, the nonprofit Commercial Alert sent a letter to Massachusetts Governor -- and republican presidential hopeful, Mitt Romney, urging him to stop the initiative, which is set to include “children as young as five."

My memories of taking the bus include never ending fights over which music was played on the radio with the end result always turning it off to keep the peace.

KEN LAY DEAD

noreply@blogger.com (Jonathan Cohen) — Wed, 05 Jul 2006 16:45:00 +0000

Ken Lay has died of an apparent heart attack.

Gates/Buffett: Immense Generosity, Missed Opportunity

noreply@blogger.com (Jonathan Cohen) — Mon, 03 Jul 2006 20:36:00 +0000

Spurred on by the groundbreaking $1 billion gift to the United Nations by Ted Turner in 1997,* Bill Gates will dedicate his efforts full-time in 2008 from Microsoft to the Gates Foundation (already the largest U.S. philanthropy with a massive $30 billion endowment), which has been buffeted by the largest philanthropic gift in history – a $31 billion gift from the world's second-richest man, Warren Buffett.

The amount of money is eye popping. The generosity immense. The power that the world’s richest man has to influence philanthropy is unparalleled.

The missing piece of the story has to do with the fact that the two richest businessmen in the world felt they could not accomplish similar societal gains through the very businesses in which their fortunes were made.

The Gates move and the gift by Buffett, 75, are classic examples of the old wealthy man’s retiree syndrome – after a long and financially successful career one feels their mortality and then seeks to “give back” and leave a legacy of helping others.

Buffett, who acted particularly selflessly by contributing the largest gift ever to a foundation in somebody else’s name, said he “agreed with Andrew Carnegie, who said that huge fortunes that flow in large part from society should in large part be returned to society,” and "There is more than one way to get to heaven, but this is a great way."

A separation exists between how even this, the most successful of investors, views the criteria for making money, versus the criteria for what should be done with it. Buffett and Gates rightly deserve all of the accolades they are getting. They have set a new bar that will hopefully become a trend.

But, when will wealthy people of prominence apply such principles to making money while they are IN business, not out of it?

*I was present when the Ted Turner $1 billion gift was announced at the annual global leadership award dinner sponsored by the United Nations Association of the USA, with which I worked at the time running their nonprofit program. Turner aired the event live on his CNN network. The U.N. Foundation was set up to disburse the gift. Note, like Buffett’s the gift was in annual disbursements of stock, which means that its value will fluctuate over time.

Study: "For American Businessmen Primetime is Crimetime"

noreply@blogger.com (Jonathan Cohen) — Sat, 24 Jun 2006 07:14:00 +0000

Good Guys and Bad Guys

With all of the public opinion research polls out there how many times have you ever been called to participate in one? It just so happens that yesterday I was called by a polling firm based out of Princeton and the subject just happened to be attitudes toward the mortgage loan industry.

As with all industries there are good guys and bad guys.

And evidently on television too. In a report called “Bad Company, For American Businessmen Primetime is Crimetime,” the conservative Media Research Group monitored over 100 episodes of top shows on ABC, CBS, Fox and NBC during sweeps weeks. They found:

TV Overwhelmingly Negative toward Business: Negative plots about business and businessmen outnumbered positive ones by almost 4-to-1. Of the 39 episodes that included business-related plots or characters, 30 (77 percent) cast businessmen and commerce in a negative light.

Businessmen Are Villains, Not Heroes: When businessmen appeared on TV, they were up to no good. Only NBC’s “Medium” and “Las Vegas” featured businessmen in a consistently positive light.

TV Businessmen a Greater Threat to Society than Terrorists or Gangs: According to primetime TV, you are 21 times more likely to be kidnapped or murdered at the hands of a businessman than the mob. Businessmen also committed crimes five times more often than terrorists and four times more often than gangs.

Businessmen Almost as Likely to Commit a Serious Felony as Career Criminals: Businessmen turned up as kidnappers or murderers almost as often (21 times) as hardened criminals like drug dealers, child molesters and serial killers put together (23 times).

“Law & Order” Franchise Finds Businessmen Guilty: In the three popular NBC shows – “Law & Order,” “Law & Order: Special Victims Unit,” and “Law & Order: Criminal Intent” – almost 50 percent of the felonies (13 of 27) – mostly murders – were committed by businessmen.

The Worst Network: CBS was the worst of the four networks, offering up far more business criminals than private-sector heroes. Shows like “Cold Case,” “CSI: NY,” and “NCIS” stacked the deck against businessmen.

Best in Show: It’s ironic that network executives had to travel to the gambling and showgirl capital of America – Las Vegas – to portray business in a positive way. But NBC’s show of the same name used this positive narrative to counter “Law & Order’s” cynical portrayal of business.

One must always ask who is being the reflector or director when documenting trends. The web site refers to itself as “The Leader in Documenting, Exposing and Neutralizing Liberal Media Bias.”

The Media Research Group’s Business and Media Institute is at least consistent – they released a report about a decade ago called “Businessmen Behaving Badly,” which found similar results. Of course, they also called Bryant Gumbel a leftist for an offhand remark making light of extreme right wing talk show host Ann Coulter’s recent bizarre comment about 911 widows enjoying their husband’s deaths.

If you like the new report two more are on the way, along with plans “to examine how businessmen are characterized on the silver screen and in TV news.”

iPod Factory ‘Slave Claims’ Reported Today

noreply@blogger.com (Jonathan Cohen) — Wed, 14 Jun 2006 18:58:00 +0000

iPod Factory ‘Slave Claims’ Reported Today

Apple is investigating a newspaper report by The Mail on Sunday that workers in Chinese iPod factories work long hours for low pay and in "slave" conditions. The Mail article alleged that employees earn as little as $49 a month working 15-hour shifts. In a factory near Shanghai the pay for making the iconic product is said to be twice as high, but half of it goes to room and board on site. Apple said it does not accept violations of its supplier code of conduct.

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“Green Treasury?”

Amid speculation that the Bush administration has changed tact recently on a number of fronts, the new Treasury Secretary nominee, Hank Paulson, was touted in a May 30 White House press release as “a strong and consistent voice for corporate accountability. When the corporate scandals broke, Hank showed his leadership and character by calling for reforms that would strengthen the way America's public companies are governed and improve their accounting practices.”

Paulson brings environmental credentials from his days as Chairman and CEO of the investment bank Goldman Sachs. Paulson is said to be quite the corporate environmentalist. He has chaired the board of the Nature Conservancy and was at the helm when Goldman signed onto the Equator Principles, a set of benchmarks for the financial industry to assess social and environmental risks of investments. Goldman issued a comprehensive environmental policy in November of 2005 that called for federal regulation on climate change that is stronger than the Equator Principles. He also served in the Nixon White House in 1972.

See the May 13^th Business-Watch post on the controversy surrounding another one of the more than 30 banks that signed onto the Equator Principles concerning its commitment versus its investments on the ground.

For more info read “The Greening of Goldman” in a June 2006 article in Fast Company, which calls the firm’s commitment “a mostly unproven promise” for now, while also stating that “even the promise is a big deal.”

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Exxon Mobil Postscript

That right of center but ever intelligent and well written magazine The Economist just ran an article -- "Can Business Be Cool?" that serves as a postscript to the Business-Watch June 2^nd piece “Exxon: Despite BIGGEST Profit Ever STILL Won’t Pay for Spill” and the May 24^th post “Carbon Dioxide Is Good For You.”

Exxon: Despite BIGGEST Profit Ever STILL Won’t Pay for Spill

noreply@blogger.com (Jonathan Cohen) — Sat, 03 Jun 2006 02:43:00 +0000

Recent research has shown that “when business executives are in a good mood people who work with them experience “more positive and fewer negative moods.” So one would naturally think that the upper echelons of Exxon Mobil would be absolutely ecstatic after bankrolling the largest profit in the history of the United States ($36.13 Billion).

Perhaps not after the U.S. Justice Department and Alaska called on the recalcitrant company to cough up $92 million to clean up the mess that still exists from their Valdez tanker spill of eleven million gallons of crude oil on 1750 kilometers of coastline that killed 250,000 marine birds, 28,000 sea otters and devastated the local environment and community 17 years ago.

On top of that, the company suffered a humiliating defeat on Wednesday when a shareholder resolution passed its annual meeting with a whopping 52.2% (double digits is considered good) calling for stronger corporate governance measures for electing the board of directors as a result of the CEO’s $400 MILLION departure pay package. Exxon said that this is the first resolution to ever pass over the opposition of management in the history of the company.

A BRIEF OVERVIEW OF THE EXXON VALDEZ TANKER SPILL SIGNIFICANCE:

1989 (March): Exxon Valdez tanker spill
1989 (September): Creation of the Valdez principles, a ten-point code of corporate environmental conduct (Later renamed the CERES Principles after the nonprofit of the same name)
1993: The first company endorses the CERES (Coalition on Environmentally Responsible Economies) Principles
1997: The CERES principles spawn the Global Reporting Initiative (GRI) in partnership with the U.N. Environment Program
2002: GRI becomes recognized as the gold standard for reporting on economic, social and environmental impacts by institutions and spins off as an independent organization
2006: Over 800 companies have issued GRI reports

Take the Enron Poll!

noreply@blogger.com (Jonathan Cohen) — Fri, 26 May 2006 15:47:00 +0000

Enron Verdict: GUILTY

noreply@blogger.com (Jonathan Cohen) — Fri, 26 May 2006 14:16:00 +0000

Ken Lay, Former chairman and founder, 64: Guilty on six counts including conspiracy, wire fraud and securities fraud. Guilty on four counts in separate bank-fraud trial. Free until Sept. 11 sentencing. Faces maximum 165 years in prison.

Jeffrey Skilling, Former CEO, 52: Guilty on 18 counts of conspiracy and fraud and one (of 10) counts of insider trading. Free until Sept. 11 sentencing. Faces maximum 185 years in prison.

Enron’s emblematic emasculation embodied the turn of the century corporation gone bad, and catapulted the field of socially responsible business onto the popular culture radar of America.

The larger danger lied in the loss of trust by average investors in the very system. An appeal is automatic. The grounds? Speculation centers on the aptly named concept of “Deliberate Indifference” -- a lower standard than affirmative knowledge (as it sounds).

The jury instructions are said to have been similar to those given in the trial of Enron's auditors, Arthur Andersen, which resulted in an overturned guilty verdict on appeal to the Supreme Court because they were vague and “flawed,” despite the disintegration of the firm by that point.

Appeal long enough and in addition to staying out of jail Lay and Skilling may become this year’s model of Frank Quattrone, the Credit Suisse First Boston technology banker who was accused of contributing to the late 90s burst of the tech bubble, but whose conviction on obstruction-of-justice charges related to a federal investigation of stock IPOs was overturned on appeal by a judge based on those pesky, nebulous jury instructions again.

…

Meanwhile, the University of Missouri Kenneth L. Lay Chair in Economics remains vacant. “The University has advertised the economics chair nationally and has continued its search for an outstanding scholar to fill this position. The Lay Chair has not yet been filled.”

Carbon Dioxide Is Good for You

noreply@blogger.com (Jonathan Cohen) — Wed, 24 May 2006 16:07:00 +0000

No, this is not my tongue-in-cheek, sarcastic quote of the day lampooning conservative climate change deniers. Why bother when they’ll do it for me.

The line can be heard in a current ad campaign by a conservative, small government group called the Competitive Enterprise Institute (CEI). The ads are running in 14 U.S. cities from May 18-28, 2006. The cities include Albany, NY; Albuquerque, NM; Anchorage, AK; Austin, TX; Charleston, WV; Dallas; Dayton, OH; Denver; Harrisburg, PA; Phoenix; Sacramento and Santa Barbara, CA; Springfield, IL; and Washington, DC.

Far right conservatives agree with many of those on the other side of the aisle on one key angle, however: “The campaign to limit carbon dioxide emissions is the single most important regulatory issue today,” says Marlo Lewis, a CEI senior fellow in environmental policy. Of course, CEI only thinks it’s important because of the need “to counter the flood of scare stories on global warming.” (Nice touch with the flood metaphor)

To show this is not necessarily a left/right issue, the Evangelical Climate Initiative, a group of more than 85 influential evangelical leaders, issued the statement Climate Change: An Evangelical Call to Action in February – another fault line between pro-business and social conservatives.

Locally, I have seen the ad, which can also be found in the dictionary next to the phrase Greenwashing. (For more on this phrase, see the previous post: SCANDAL WATCH: Jury Out on Enron?)

SCANDAL WATCH: Jury Out on Enron?

noreply@blogger.com (Jonathan Cohen) — Sat, 20 May 2006 17:09:00 +0000

HOUSTON – The stock market faces a landmark test of credibility with the outcome of the Enron trial on which a jury is deliberating as I write this. By extension, the social responsibility of business is on trial as well. Critics call it PR. Greenwash in the case of the environment. Or “Astroturf” (as opposed to grassroots) when hidden behind the veneer of a nonprofit that purports to represent a public groundswell rather than a publicly traded company.*

One quote from Enron’s 2000 Annual Report warrants continuing vigilance by the common investor: “We are satisfied with nothing less than the very best in everything we do. We will continue to raise the bar for everyone. The great fun here will be for all of us to discover just how good we can really be” (As cited by Steve Lydenberg in his 2005 book Corporations and the Public Interest: Guiding the Invisible Hand, Berrett-Koehler Publishers).

Enron issued a socially responsible business report. It had staff in charge of socially responsible business. It lied.

If former Enron chair and CEO Ken Lay and former CEO Jeffrey Skilling get off, it will set back the state of socially responsible business a generation. Every generation has its defining moments that impact future generations until their own collective watershed moment when the stars align and the structures that separate us from animals in the investment wilderness show themselves for what they are – a glorified honors system that unethical people will take advantage of until they’re caught when egregious enough to warrant slow moving systems of justice to devote their resources to investigating the problem within the narrow confines of laws that expensive lawyers can’t get around.

“My staff did it,” and “I didn’t know” rank right up there in the annals of modern excuses with “I don’t remember” and “I want to spend more time with my kids.” "Rules," Lay said, "are important, but you should not be a slave to rules, either," and “there's no way I could take responsibility for the criminal conduct that I didn't know about."

We want to believe that Enron was just one of a few bad apples, along with:

WorldCom (The BIGGEST bankruptcy ever -- $11 billion accounting fraud)
Global Crossing (The sixth largest bankruptcy in U.S. history)
Adelphia ($2.3 billion in hidden debt)
Royal Ahold ($1.1 billion settlement)
AIG ($2.3 billion restatement)
HealthSouth ($1.4 billion in false earnings, says SEC)
Fannie Mae (Over $10 billion in accounting errors)

etc.

And we don’t want to believe people like former Enron executive, and author of Confessions of an Enron Executive: A Whistleblower's Story, Lynn Brewer – when she said just about a year ago that “100 of the FORTUNE 500 companies could possibly be cooking their books.”

While some corporate executives have been punished for taking away much needed trust in our financial markets, Enron stands as a symbol that must have closure. Reputations take years to build and minutes to lose. My hopes and investments lie with the jury of eight women and four men in Houston, Texas.

…

Meanwhile back in the jungle, as the New York Dolls once sang about Vietnam, Kenneth Lay started his second trial on bank fraud violations where he stands accused of lying about how he used a multi-million dollar line of credit (i.e. “I won’t use it to buy stock,” and then using it to buy stock).

…

Showing the game is never up, as long as the lawyer fees get paid, an embodiment of tech bubble prognostication, who may have lost you more mutual fund money than anybody else by recommending stocks he had a financial interest in – former Merrill Lynch internet stock analyst star Henry Blodget, has admitted no wrongdoing. The firm paid $200 million in penalties. His worst penalty? He can’t work in the securities industry and prescribe stock picks again.

To keep up with the sage’s advice on the tech industry, simply view his blog, where it helpfully notes that Blodget or others in his employ “own stock in Yahoo!, Time Warner, Amazon.com, eBay, and Microsoft and may own stock in other companies mentioned here.”

*What does the nebulous phrase socially responsible business mean? It’s the responsibility a business has to its employees, shareholders, customers, suppliers, stakeholders and communities where it operates. (Cohen, J. (2004) “Socially Responsible Business: Global Trends,” in A Future for Everyone, Routledge and elsewhere).

Big Box Organic – You Are What You Eat

noreply@blogger.com (Jonathan Cohen) — Wed, 17 May 2006 16:53:00 +0000

What starts out as an altruistic pipe dream – changing the world in some positive way, faces some tough decisions along the way – just ask Google.

A famous often-quoted saying by Margaret Mead goes “A small group of thoughtful people could change the world. Indeed, it's the only thing that ever has.”

But what Margaret doesn’t say is how to deal with going beyond that small group of thoughtful people to deal with those who don’t share that original zeal, but are needed to carry it to others who don’t share that original zeal.

The biggest dilemma in any movement for change is scale – and keeping a semblance of the original goals intact upon hitting the mainstream. Enter the world’s largest retailer, Wal-Mart, with plans that will change what you eat forever.

The company has announced that it will start offering organic food at just 10 percent over the cost of conventional food.

The very definition of what it means to be organic (i.e. certification by an independent third party) will become more important than ever, and face more pressure than ever now that Wal-Mart and its massive network of suppliers will be in the game. “Many of the nation's major food producers are hard at work developing organic versions of their best-selling products,” NPR reported on May 12^th, which will in turn squeeze out every inch of profit and supply chain efficiency as with every other Wal-Mart product line.

Organic products of all kinds will be introduced to a market that did not go far beyond a stable of health food stores not long ago, and become the norm rather than the exception. Parents: Wal-Mart recently offered the first organic infant formula available at a mass retailer. Further, the 800 pound retailing gorilla is introducing George Baby organic cotton clothing for infants this month, which is made with 100 percent certified organic cotton.

On the plus side, organic food and clothing will become cheaper, allowing multiples of consumers to buy healthier food on a regular basis and support healthier farming practices as a result.

Read the label: Unless a product is “100%” organic, it is not. That is, five percent of the ingredients in food labeled organic and 30 percent in those labelled “made with organic ingredients” may be nonorganic. Many revisions to these standards go unannounced, despite the tremendous public interest, as evidenced by the record 275,000 comments from the public submitted when the government was pressured to water down the standard for organic labels in 2002. “Since 2002, there have been repeated assaults on the [Organic Standards] board's authority and on the standards themselves from companies that want to reap the benefits of the organic label without the burden of higher production costs.”

When the New York Times, NPR and Consumer Reports are covering a story that means it’s news.

If you have any interest in what goes into your body, read the label.

…

On a somewhat related note, Fast Food Nation – the essential book now turned film, debuts at Cannes this month. Fave director Richard Linklater, he of Slacker, Dazed and Confused and School of Rock fame, stands as the man behind the camera.

Excerpt from a Forbes magazine interview with Fast Food Nation author Eric Schlosser:

Q: Aren’t fast-food chains just supplying what American appetites demand?

A: The American people were not demanding chicken nuggets.

The industry has done a lot to create that demand. Also, hamburgers and fries only became the national dish after marketing made it that way following World War II.

ABN AMRO Bank Finds Out if All Press Is Good Press

noreply@blogger.com (Jonathan Cohen) — Sat, 13 May 2006 19:52:00 +0000

The World Environment Center awarded its 2006 Gold Medal for International Corporate Achievement in Sustainable Development to AMB AMRO Bank last night for its work on the Equator Principles, the first ever framework for incorporating environmental and social issues in private bank lending for large ($50 million and over) development projects.

The company’s commitment to those very principles lies at the heart of controversy surrounding involvement in the Sakhalin oil project in the Russian far east. Touted as “the world’s largest oil and gas project” by its developers, the project includes plans for two 500 mile pipelines as well as undersea pipelines valued at over $12 billion.

The Rainforest Action Network and others ran a full page ad in yesterday’s Washington Post (a popular tactic by both business and NGOs of late – see the May 10th BUSINESS-WATCH post), and planned a protest for last night’s awards ceremony.

A key issue here is assuring that companies abide by the principles and standards they commit to. A company that adopts the Equator Principles is supposed to “individually declare that it has or will put in place internal policies and processes that are consistent with the Equator Principles."

Without a credible enforcement mechanism, preferably monitored by an independent, external third party, business cannot expect its stakeholders to simply take their word on it in our post-Enron world.

NGOs Control Wall Street, Business Group Says

noreply@blogger.com (Jonathan Cohen) — Thu, 11 May 2006 05:07:00 +0000

The Washington Post ran a piece on health research this week, which revealed that PERCEPTION of a given fear has the same effect as if actually experiencing the fear.

Today’s Washington Post ran a FULL PAGE AD with a man wearing a ski mask under the bold header “I Control Wall Street.”

Who feels so aggrieved you ask that they would take out such a full page ad? None other than Life Sciences Research Inc. – whose wholly owned Huntingdon Life Sciences subsidiary tests products on some 75,000 animals each year, and is public enemy number one to a particularly rabid strain of NGOs. The company claims they were yanked from being listed on the NYSE “minutes before” its scheduled launch, because the big board was “reportedly threatened by animal rights activists,” who are alternately referred to as “terrorists.”

“Will Your Favorite Blue-Chip Be Next?” asks the NYSE Hostage web site. “Anti-business activism” is said to be alive and well, including eco-terrorists and also labor unions as part of a movement. The site surprisingly features a direct link to the NGO Stop Huntingdon Cruelty, which is said to have 100 corporate targets in its crosshairs.

Publishing Plagiarism Payback

noreply@blogger.com (Jonathan Cohen) — Mon, 08 May 2006 20:26:00 +0000

Plagiarism payback burned Raytheon CEO Bill Swanson and Harvard sophomore Kaayva Viswanathan this past week. Swanson's company produced a booklet of business advice that turned out to have been lifted from a 1944 book, and Viswanathan's Little, Brown & Company published book about how to get into Harvard (of course) turned out to have lifted from two previous coming of age novels.

Swanson had garnered accolades for his business acumen, Viswanathan for her eye popping advance of $500,000. Swanson said staff compiled material he had collected in a file for years. Viswanathan said she "internalized" the other books as a fan.

Raytheon stopped distribution of the 300,000 run booklet and will not give Swanson a raise this year as a result. Viswanathan's 100,000 print run has been pulled from the shelves, the second book in her contract will not be published and a movie deal has fallen apart.

After Enron, WorldCom, et al, Congress passed the Sarbanes-Oxley law that required business executives to vouch for their company's financial statements.

We now need Sarbanes-Oxley for writers.

What's the impact of the Enron guilty verdicts?
	Just desserts
	Won't be a deterrent
	Will get off on appeal
	I’m investing in ethanol from now on
	Reaffirms my faith in the market

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