This should not come as any surprise — apparently there is a correlation between a company’s commitment to corporate social responsibility and its employees’ attitudes.

An article from PersonnelToday.com notes that, “seven in ten employees are positive about their employers’ commitment to corporate social responsibility,” which “has a positive effect on opinions about their employers’ sense of direction, competitiveness, integrity, and employee engagement.” The information in the article is presented in a rather odd way as it is not clear whether the company’s commitment to CSR has to actually create positive results, only that seven in ten employees have to feel positive about the commitment.

Hmmm. I can’t tell if this is a clever way of skirting less than ideal survey results or simply a lack of focus during the editing process. Regardless, I give the author the benefit of the doubt that the employees in the 70% bin are satisfied because of the progress of the company’s CSR efforts in addition to its commitment.

If the above assumption is correct, then it is possible to extrapolate for the employees that the noted “positive effect on opinions about their employers’ sense of direction, competitiveness, integrity, and employee engagement” should lead to greater retention rates. …and since we all know that high employee turnover can do some serious damage to a company’s bottom line (vs. a low turnover rate) I’d say that alone is a pretty good reason to take CSR seriously from a business perspective.

After my previous post I decided to look into a broader date range to determine the overall return of the fund in relation to the most common market indexes. To the right, click on the chart to see the maximum range I was able to produce (thank you Google Finance).

The resulting returns are interesting indeed. Not that any of the listed indexes produced the most phenomenal annualized returns during the period, but the Calvert Social Index, in comparison, did quite well.

Note that the chart range begins in April 2001, however, the Calvert Social Index has been around since late June 2000. If you know of a way to massage Google or Yahoo! Finance to produce the full range from June 30, 2000 to the present day, please let me know.

Take a moment and click on the chart to the right. The resulting enlarged version will display a five-year chart plotting the returns of the Calvert Social Index (CISIX) in comparison to the three leading US indexes (NASDAQ, S&P 500 and the Dow).

Of note, you will find that the Calvert Social Index runs in near lockstep with the S&P 500 and the Dow (the former has a slight 5-year advantage). The tech-heavy NASDAQ trounces the group, though a longer time frame (say 10 or 15 years) might prove otherwise.

So, are there any takeaways? I’d like to say that if you intend to invest in indexes tracking the S&P 500 or the Dow, you may as well invest in the CISIX as your returns will be comparable. Unfortunately, such a simplistic statement is somewhat naive, especially given that it would be solely based on a quick 5-year comparison. That said, the Calvert Social Index is a leading SRI fund and should be given strong consideration by investors seeking social responsibility in their investing activities.

If you are interested in reading more about SRI, here are a few relevant posts:

• SRI Overview & Calvert
• Effectiveness of SRI
• Motley Fool on SRI
• Vice Stocks
• SRI Article
  

An interesting ethics-related article in Business Week has been available for a few days (Duke MBAs Fail Ethics Test) though I only just now have had a moment to read it. While the information presented is nothing new (cheating among highly competitive graduate students…really?!) the statistics are shocking nonetheless.

“Fifty-six percent of graduate business students admitted to cheating one or more times in the past academic year, compared to 47% of nonbusiness students, according to a study published in September in the journal of the Academy of Management Learning & Education (see BusinessWeek.com, 10/24/06, ‘A Crooked Path Through B-School‘).”

Okay, sweet. And we wonder why there is a distinct lack of ethics in business… Clearly, if today’s business students are tomorrow’s business leaders, it seems as if the future will get worse, not better, as far as business ethics are concerned.

So if the picture is so bleak, what steps can be taken to move the statistics in the other direction? Two of the primary reasons are easy to spot, and are hopefully, by extension, easy to combat:

1. Culture and general consensus
2. Strength and consistency of ethics initiatives

I have posted on both issues in the past (most recently, see Speak Up and The Validity of Ethics Codes) and feel that the corrective mechanisms are straightforward and attainable. Rather than repeat myself regarding solutions, I would emphasize the importance of tackling ethical issues now — the longer they have to fester and grow, the greater the difficulty in getting rid of the issue in the future.

This news could not have been more timely, at least on a personal level for me: Advito launches corporate social responsibility service portfolio. Though Spring finally seems to have arrived here in Boston, and indeed, the week-old leaves and flower blossoms on the trees appear to be holding off any last-minute attempt for more winter weather, I still find myself yearning for a trip to a nice sandy beach in the Caribbean.

Advito, it seems, feels that there is a market for corporate travel programs with a focus on corporate social responsibility (CSR). While I think that is great (a wonderful initiative to push, and a potentially fantastic business idea…) I am not so certain that the majority of clients will think twice about whether their travel is CSR-friendly or not. That said, perhaps that dynamic exists because there isn’t greater clarity about the impact of travel on CSR-related concerns.

My feelings aside, Advito, naturally, feels that, “Interest in CSR and corporate travel is growing steadily.” Whether that interest is as strong as Advito implies, the increased interest is positive. Similarly, the reasons the company cites for pushing a CSR-friendly travel agenda are strong:

“‘Contrary to popular belief, taking CSR into account does not mean adding more cost to your programme,’ said Victor van Tol, Advito’s vice president – EMEA. ‘On the contrary, by avoiding governmental fines and making smart travel decisions based on business criticality and preferred supplier usage, you can realise significant cost reductions while meeting your environmental and social responsibilities.’”

As an aside, here’s a hat-tip to you, Mr. Jack Yan — I loved your recent post about Kevin Roberts and found myself struggling with “program,” “programme,”  or “prahgram” (the latter is my best attempt at Boston-English).

Not exactly the most jarring combination of words. The jump — from “green” to “money” when the former is paired with a reference to one of Manhattan’s most posh neighborhoods — is really more of a small hop. In fact, second to conjuring up images of Central Park, I would find it hard to connect “green” with little else, given the context. The New York Times has a different idea, though, and the result, Eco-Socialites Make Cleaning Green a Priority, is an interesting read.

A few choice clips:

“Her guests, familiar fixtures in the party pages of Vogue and Harper’s Bazaar, were improbable grime fighters. They included young society stalwarts like Renée Rockefeller, Valesca Guerrand-Hermès, Melania Trump and Jessica Seinfeld. Given their designer wardrobes, their houses flung about the country, and an aggregate income the size of a small duchy, they were odd candidates for a sales pitch that urged looking beneath the kitchen sink and tossing out your toxic powders and sprays…”

“Still, [Ms. Barnett] has no plans to reduce the family’s significant carbon footprint by, say, selling the Manhattan second home. ‘I’m not a perfect person,’ she said. ‘I’m not the greenest woman in America.’ And there was scant indication that other guests, most of whom, presumably, knew their way up the steps of a private jet, were contemplating major lifestyle cutbacks. Glancing about the room, Ms. Barnett said, ‘We aren’t all going to move to one-bedroom apartments.’”

And perhaps my favorite:

“[Ms. Rockerfeller] plans to practice conservation, to a point. Energy-saving light bulbs are fine — for the utility closet, perhaps. In other rooms, ‘they don’t give a very pretty light,’ she said.”

I was not planning about posting about this, but if you have yet to notice the new issue of Vanity Fair, be sure to take a gander. If you are unfamiliar with the magazine (admittedly, I am not sure if I have ever read an issue before) grab the latest copy off of the newstand and see if you can figure out the glaring contradiction. In short, the magazine stands a fair chance of having a good time on a seesaw with a Mini Cooper on the other end (as would most magazines of the same genre I suppose).

My first exposure to the “Green Issue” came last night when I opened one of the grocery bags from a trip my wife and I took to Whole Foods. She, like many readers, purchased the issue because of her interest in the environment and related issues. While I gawked at the heft of the magazine (The Inspired Protagonist noticed the same contradiction of “green” being bundled with such massive paper usage) the second wave of irony (that the magazine was purchased at Whole Foods) made me feel a bit silly. Will readers really take a magazine seriously that uses for its cover image a photograph of Leonardo DiCaprio decked out in an arctic coat and crampons and nearly snuggling a baby polar bear? It almost diminishes Leonardo’s more serious side…

I think the concept is somewhat cheesy, but from a more “level” standpoint, it is promising to see Vanity Fair publicizing the issue. If I can force myself to crack the magazine open, I’ll post about anything I found interesting.

…Or lack thereof, I suppose.

I tend not to write about technology issues, and even less so about international technology issues, but a recent article on Ars Technica piqued my interest enough to mention it here. (As an aside, if you have not visited Ars Technica before, I’d recommend popping by every now and then, even if technology is low on your interest-radar.) The article, World Economic Forum releases annual IT rankings; US plummets from the top, touches on the decline of US-dominance in technology.

Why did it grab my attention? In short, I tend to look at broad metrics such as where a nation stands relative to its peers in technology investment, innovation, and leadership, as a barometer for other complimentary metrics. While this is a rough (perhaps very rough) exercise, it is conceivable to correlate US technology innovation with the country’s innovation in math or science education. Again, this is rough, but a decline in technology dominance can certainly stem from a decline in related education innovation, in the current educational environment, and perhaps more reasonably in periods prior.

Looking to similar measures as indicators for progress, or a decline in progress, for business innovation (as it pertains to CSR, ethics, governance, sustainability, etc.) is practical and effective. Obviously the closer the relevance of the metric is to such issues (e.g. international rankings on the development of alternative fuels points to sustainability issues), the greater the correlation and utility between the two will be.

If you have an interest in technology issues, here are a few passages from the article you might find particularly interesting:

“Denmark has been steadily climbing towards the number one spot in the GITR, and the report credits government policy there—and in other top-ranked countries—along with a good system of higher education that produces technology-savvy graduates.

“…Higher education is keeping the US in the game; public policy that hinders technological innovation and overbroad regulation are responsible for the drop in rankings. ‘Much of the slip can be attributed to a relatively complex political and regulatory business environment,’ according to Soumitra Dutta, Dean of External Relations at INSEAD and another report coeditor.”

Xcitec GmbH, a German software firm (the link points to the firm’s English-language site), today issued a press release touting the CSR features of their standard supplier-management software. Skeptical? Supplier software to enhance corporate social responsibility? Sounds a bit improbable to me. I found the release rather vague, and following a visit to the company’s website, failed to find more detail regarding the CSR features than was contained in the press release.

Even though I was unable to find greater detail, I like the intended purpose of the software:

“Xcitec standard software realizes Corporate Responsibility in all major supplier management steps – supplier qualification, supplier rating and supplier development. During supplier qualification, the supplier is extensively questioned regarding risk factors. CR aspects are integrated into the criteria catalog during supplier rating, and the supplier’s adherence to these is evaluated. Supplier development documents supplier optimization measures and monitors progress.”

I would be interested in seeing the software in action — how it works, whether the CSR features are bloat or if they actually help increase supplier accountability, etc. If you have experience with the software, please let me know.

A question that I continually hear following reports of company misconduct, fraud, or other illicit activity, especially when the action was too large to possibly go unnoticed, was how the action went unreported for so long. Why don’t people speak up when they know something improper is going on at their organization? There are a host of possible reasons, but a recent article by Ethical Corporation, Workplace Misconduct – Making ‘Speak Up’ Procedures Effective, shares some interesting statistics as well as some practical advice.

First for a few sobering statistics from the article. Here are the top four reasons why people were likely not to speak up:

• 21% – Possible alienation from colleagues
• 19% – That the issue was ‘none of their business’
• 13% – Fear of their job being jeopardized as a result
• 12% – ‘Everybody is doing it’

While the first and third seem like reasonable initial reactions, I find the second and forth as particularly troubling.

The article continues with excellent advice for organizations looking to increase the percentage of individuals willing to speak up when they become aware of any kind of misconduct. In addition, the suggestions are great building blocks for any company wishing to strengthen ethical conduct among its employees and partners. The article details the follow four principles:

1. Create and support an ethical culture;
2. Take swift action when misconduct is identified;
3. Ensure transparency in all communication (hmmm, I wonder if Dell is listening…); and,
4. Provide ethical training and leadership

I think the above list is a great start. Add in a stipulation for ongoing training to maintain the ethical culture, and to ensure the retention of the training and leadership, and I think it would be a fantastic platform for organizations of any size.