C o llegiat e

Case

S tu d y

THE NATION ’S NEW S PAPER

Eco-marketing a hot topic foradvertisers at CannesBy Laura Petrecca and Theresa Howard

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Critical InquiryDiscussion and future implications

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Boardrooms open up toinvestors’ inputBy Edward Iwata

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American CEO’s take on EuropeBy Del Jones

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www.usatodaycollege.com

© Copyright 2008 USA TODAY, a division of Gannett Co., Inc. All rights reserved.

Corporate Social Responsibility (CSR) is a concept whereby corporations (orother for-profit organizations) consider the interests of the societies withinwhich they are based and operate. Moving beyond philanthropy and com-pliance, CSR addresses how companies manage the impact of their econom-ic, social, and environmental policies, as well as their relationships with cus-tomers, employees, suppliers, shareholders, and communities.

CSR has become a multi-billion dollar public relations specialty in the busi-ness world, yet there are those who argue that the positive impact of CSR onbusinesses is overblown and say companies exist to sell products, makemoney and please shareholders — not to save the world.

Corporate Social Responsibility

Businesses grow moresocially conscious

Additional Resources andVoices extension.................................................................................. 13

By Edward IwataUSA TODAY

Activists have argued for decadesthat companies, as good corporatecitizens, are morally obligated toadopt socially responsible businesspractices. On their end, companiessay they exist to sell products, makemoney and please shareholders —not to save the world.

But those clashing views may befinding common ground, say busi-ness experts on the movementknown as "corporate social responsi-bility," or CSR.

There's growing evidence that com-panies are embracing CSR practices -- whether it's reducing factory andtransportation pollution, using natu-ral materials for packaging or treatingworkers fairly — because theybelieve such strategies can be prof-itable and socially responsible.

"All of a sudden, corporate responsi-bility is an idea whose time hasarrived," says Julie Fox Gorte, chiefsocial investment strategist at theCalvert Group, which managessocially responsible mutual funds."We're seeing more companies whothink it's not just a philosophy, butgood for business, too."

Study shows value

Christine Arena, a San Francisco busi-ness consultant and author of TheHigh-Purpose Company, says more

More think strategycan also be profitable

USA TODAY Snapshots®

Mixing ads and social issuesIs it acceptable for companies to involve a cause orissue in their marketing?

Source: Cone Corporate Citizenship study of 1,033respondents. Margin of error ±3 percentage points.

By Darryl Haralson and Alejandro Gonzalez, USA TODAY

Yes72%

No23%

Notsure5%

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corporations are using CSR not for feel-good philanthro-py or to polish their public image, but as long-term cor-porate strategy.

Arena and 10 MBA students at McGill University studied75 U.S. corporations, including Wal-Mart, McDonald's,Volvo, JetBlue, outdoor retailer Patagonia, clothingdesigner Eileen Fisher and agricultural products compa-ny John Deere.

They found that many are visionary, risk-taking compa-nies that Arena calls "the early adopters, the alphas ofthe modern business world." The companies are stakingtheir business growth and future on environmental andsocial goals. For instance:

u General Electric. CEO Jeffrey Immelt announced GE's"Ecoimagination" initiative two years ago, and the con-glomerate hopes to double its revenue from environ-mentally clean technology to $20 billion by 2010. Amongthe products and services: fuel-efficient jet and trainengines, wind turbine power, energy-saving fluorescentlight bulbs and water purification projects.

u Toyota. Critics scoffed when it launched the Priushybrid car in the USA in 2000 and in Japan a decade ago.Today, the Prius is so popular that Toyota expects to sellmillions of hybrid cars and SUVs worldwide by 2010 inthe Prius, Highlander, Lexus and Camry models. Now,Ford Motor, Nissan, General Motors and others are goingthe hybrid route.

uWegmans Food Markets. While many businesses suf-fer from poor staff morale, this $4 billion retailer boasts aworker-friendly culture and cost savings from lowturnover of employees. Workers enjoy generous salariesand benefits, vacation time and training. Each year,130,000 job hunters apply to Wegmans — ranked No.1 inFortune's "Best Large Companies to Work For" list in2005.

"It's not a fleeting fad," Arena says. "These companies areinvesting money in a way that creates social, environ-mental and financial value. They can't afford to stopinvesting in this higher purpose."

But many companies still ignore CSR issues, she says. Inher study, 14 of 75 failed the litmus test. They preachedsocial values, but made fewer investments in CSR prac-tices than "high-purpose" companies did.

Companies such as ExxonMobil, she says, face lawsuitsand a public backlash when they fall short on environ-mental and social issues. A federal judge recently ruledthat ExxonMobil must pay $2.5 billion in damages fromthe Exxon Valdez oil tanker spill in 1989.

Economists and executives have debated for decadeswhether CSR practices help the bottom line. The lateeconomist Milton Friedman panned social values in theboardroom, saying the No.1 goal of businesses is toboost shareholder value. Leading scholars such as DavidVogel, author of The Market for Virtue, believe the posi-tive impact of CSR on businesses is overblown.

But CSR gained momentum in the 1980s, when the anti-apartheid movement forced firms to withdraw invest-ments from South Africa, and in the 1990s, when gar-ment and retail companies were blasted for their suppli-ers' sweatshop labor conditions. More companies real-ized they could not ignore the link between their busi-nesses and social issues.

In the most sweeping research on the topic, theUniversity of Redlands' Marc Orlitzky and the Universityof Iowa's Sara Rynes and Frank Schmidt looked at 52studies — covering 34,000 companies worldwide — oncorporate social responsibility over a 30-year period.

'A virtuous cycle'

Their 2004 study found that well-run, profitable busi-nesses also boasted strong social and environmentalrecords, and vise versa. Overwhelmingly, firms that

Jack Gruber, USA TODAY

Consultant: Christine Arena, author of The HighPurpose company, works in her San Francisco home.

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rewarded employees with good work climates and high-er pay and benefits ultimately saw stronger sales andstock prices, plus less employee turnover."It's a virtuous cycle," Rynes says. "As a companybecomes more socially responsible, its reputation andfinancial performance go up, which causes them tobecome even more socially responsible."

Clearly, CSR isn't going away.

"Some still think CSR is a distraction," Orlitzky says. "Butmore business strategists now believe that socialresponsibility has economic value."

Hundreds of corporations churn out annual "CSRreports" that tout their social consciences and businesspractices. Investors poured $179 billion in 2005 — upfrom only $12 billion a decade earlier — into sociallyresponsible mutual funds, reports the Social InvestmentForum. Businesses and environmental groups are evenjoining forces.

Last month, the U.S. Climate Action Partnership — a newalliance that includes GE, DuPont, Alcoa, Caterpillar,Duke Energy, Environmental Defense and the NaturalResources Defense Council — urged lawmakers and theWhite House to reduce greenhouse gas emissions andhasten technology research.

DuPont's transition

Many CSR experts point to DuPont, the $27 billionchemical manufacturer in Wilmington, Del., as a compa-ny evolving successfully from the old smokestack indus-try era into the environmentally aware 21st century.

DuPont used to rely heavily on fossil fuels to make paint,plastics and polymers. But in the 1990s, DuPont —

renowned for its R&D that created products such as thesynthetic fiber nylon — decided to pour billions of dol-lars into safe, environmentally friendly products.For instance, DuPont and British food refiner Tate & Lylemake Bio-PDO — a corn-based chemical used in cosmet-ics, detergents and material in carpeting and clothing —at a $100 million plant in Loudon, Tenn.

Since 1990, DuPont has cut greenhouse gas emissions by72% and air carcinogen emissions by 92% at its facilitiesworldwide, says Dawn Rittenhouse, DuPont's director ofsustainable development.

But DuPont, like other companies that claim to be social-ly responsible, still faces some issues.

DuPont faces lawsuits alleging that perfluorooctanoicacid (PFOA), a chemical compound used in the making ofTeflon, poses public health risks and contaminates drink-ing water — charges denied by DuPont.

Two years ago, DuPont agreed to a $16 million settle-ment with the Environmental Protection Agency after itwas accused of failing to report data on PFOA, a likelycarcinogen. DuPont later volunteered to halt by 2015 allPFOA emissions from its plants.

Beyond the legal fights, DuPont keeps plowing newground. The company vows to make $2 billion a year inrevenue by 2015 from 1,000 products that save energyand reduce pollutants.

"What's good for business," Rittenhouse says, "must alsobe good for the environment and for people worldwide."

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Boardrooms open up to investors’ inputMore companies listening to their concerns, taking actionsBy Edward IwataUSA TODAY

As the 2007 proxy season winds down, activist share-holders are gaining more clout and a greater say inboardrooms on corporate-governance issues than everbefore.

Recent shareholder victories on key issues — plus a newwillingness by companies to discuss boardroom topics —mark a turning point from the chilly ties and combativedebates between the most vocal shareholders and com-panies.

"This is the era of engagement," says Amy Borrus, deputyexecutive director of the Council of InstitutionalInvestors, which represents public pension funds andother large shareholders. "Directors aren't just digging inand saying no. They realize it makes sense to listen toshareholders."

A record 1,169 shareholder resolutions were proposedthis year, says Carol Bowie, corporate-governance direc-tor at Institutional Shareholder Services (ISS), a proxy-research firm. And a record 23% of those were with-drawn by shareholders after companies agreed to adoptnew policies, or to sit down and discuss the issues.

Since the 1980s, public pension funds and other activistshareholders have crusaded against poorly run compa-nies and weak directors and executives. Their mainweapon has been shareholder resolutions aimed at com-panies and urging investors to vote on various issuesbefore annual corporate meetings.

Shareholders have fought outrageous CEO pay packages.They've urged spineless directors to provide strongeroversight of management. They've pressured executivesto police their companies for accounting fraud.

For many years, business leaders dismissed dissentingshareholders as rabble-rousers who dragged social, laborand environmental issues into the boardroom. Theyargued that executives and directors, not investors,should run companies.

Today, though, companies can no longer ignore share-holders, whose proposals on CEO pay and other hot-but-ton issues are receiving record high "support" votes of30% to 60% from investors. In earlier years, votes of 2% or3% were common.

Shareholders' votes are only advisory. But publicly trad-ed corporations can ill-afford to anger investors whohold billions of dollars in stock.

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In June, for instance, one-third of Yahoo shareholders —upset over the Internet giant's poor stock and earningsperformance and former CEO Terry Semel's $108 millionpay package — voted against re-electing one or moreYahoo directors. The high "no votes" were believed to bea big factor in Semel's resignation as CEO, although heremains board chairman.

Better relations

This year's proxy season also shows that relationsbetween shareholders and companies clearly areimproving, with more corporations and investors seek-ing common ground on issues.

"It's staggering — there's definitely a sea change goingon," says Carolyn Kay Brancato, governance director atThe Conference Board, a business-research organization."Companies are taking shareholders' issues much moreseriously than they used to."

There are several reasons for that:

uIn the post-Enron era, companies have strengthenedtheir oversight because of tougher anti-fraud andaccounting laws, the federal crackdown on corporatecrime, and court rulings that say directors can be heldliable in shareholder class-action lawsuits.

uMore investors and companies realize that corporate-governance, labor and environmental issues are main-stream investment issues, not "fringe nuisance propos-als" that surface at annual meetings, says HowardSherman, CEO of the GovernanceMetrics Internationalresearch firm.

"These issues have financial impact and can affect port-folio returns," Sherman says.

uFaced with Congress and the Securities and ExchangeCommission imposing new rules and regulations, agrowing number of executives and directors prefer tomeet privately with shareholders over corporate-gover-nance issues.

"Rather than wait for something to be mandated, smartcompanies implement best practices voluntarily and ontheir own timeline," says Tracey Rembert, senior gover-

nance analyst for the Service Employees InternationalUnion (SEIU).

Business leaders argue that some activist shareholdersoverstep their legal bounds. State corporation laws givedirectors and management, not shareholders, the powerto run companies, says John Castellani, president of theBusiness Roundtable, an organization of U.S. executives.

"At a certain point," Castellani says, "executives becomeso distracted by these issues to the detriment of produc-ing shareholder value."

Businesses also argue that some labor and environmen-tal activists advance their political agendas, rather thanaddress broader corporate-governance issues.

David Hirschmann, senior vice president at the U.S.Chamber of Commerce, warns that too much sharehold-er power will lead to divided boards and directorsbeholden to special-interest groups.

Nonetheless, shareholders and business officials saythere have been several breakthroughs this year, includ-ing:

uMajority voting proposals. In one of the most hotlydebated proxy issues over the past decade, shareholdershave pressed companies to adopt majority voting fordirectors to be elected to board seats.

For decades, board directors were elected by a simpleplurality vote, or whoever received the largest numberof votes. Activist shareholders contend that the pluralitysystem made it difficult to oust lame directors, and thatit's more democratic to choose directors by a 51% major-ity vote.

So this year, activist shareholders — such as the UnitedBrotherhood of Carpenters and Joiners of America pen-sion fund — filed 140 resolutions with companies, urgingshareholders to approve majority voting.

To the surprise of shareholders, more than half of thosecompanies agreed to voluntarily adopt majority voting,so shareholders withdrew their resolutions, according toBowie at ISS.

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"This is absolutely unprecedented, for so many proposalsto be withdrawn," Bowie says.

Following the lead of Colgate-Palmolive, Pfizer and oth-ers, more than 400 U.S. companies have adopted majori-ty-voting policies — "a very healthy trend," saysSherman of GovernanceMetrics.

uSummit talks. Shareholders and business leaders arecooling the fiery rhetoric and forming several workinggroups to hash out the most troublesome proxy issues,from out-of-control executive pay to the shareholders'"majority-vote" issue.

High-powered shareholders and corporate leadersrecently signed "The Aspen Principles," an agreement towork closely on executive pay and other issues. The par-ties included the AFL-CIO labor federation, the BusinessRoundtable trade group for executives and the Council ofInstitutional Investors.

In another big summit in New York this summer, 150shareholders, executives and directors met in conferencerooms at the Latham & Watkins law firm to air theirviews — and possible solutions — on shareholder resolu-tions seeking to cap sky-high pay to executives.

What's more, pharmaceutical giant Pfizer said recentlythat it will meet yearly with large shareholders to dis-cuss corporate-governance and pay issues.

Dozens of companies have called Pfizer to ask about itsplans, according to Margaret Foran, senior vice presidentof corporate governance at Pfizer.

"People are coalescing around issues," Foran says."They're looking at the pros and cons in good faith."

uGlobal warming resolutions. A record 43 global-cli-mate resolutions were filed by Trillium AssetManagement, Calvert mutual funds, the SEIU and theNorth Carolina state treasurer with energy, auto, home-building and financial companies.

Shareholders withdrew one-third of the resolutions afterthe companies — ConocoPhillips, Toll Bros. and others —

agreed to reduce their greenhouse gas emissions orreport on their energy-efficiency plans.

The resolutions that went to a shareholder vote garnereda record 22% support, says Ceres, a coalition of largeshareholders and environmental groups. No longer areenvironmental resolutions ignored as tree-hugger issues,says Ceres President Mindy Lubber.

At her group's first conference on global warming in2003, turnout was low. Now, the conferences arejammed with senior executives furiously taking notes.

"Climate risk," Lubber says, "is a fundamental economicissue that affects shareholder value, the strength of com-panies and the fiduciary duties of corporate board mem-bers and large investors."

uOut-of-control pay. As pay keeps rising for CEOs,shareholders keep pushing to cap excessive salaries andstock packages for executives whose companies performpoorly.

Last year, shareholders were outraged over sky-highcompensation and retirement pay to former CEOs atHome Depot, Pfizer and other companies.

So this year, a record 124 pay-related resolutions byshareholders received average support votes of 30% to43% at Apple, Hewlett-Packard and other companies,according to ISS.

The resolutions sought to link executives' pay to theirperformance, to give shareholders advisory votes on payand to halt the controversial practice of backdating stockoptions.

Aflac, the health-insurance firm in Columbus, Ga.,became the first major U.S. company to voluntarily giveshareholders an advisory vote on executives' pay, start-ing in 2009.

In a statement last spring, CEO Dan Amos said thatshareholders, as owners of the company, "have the rightto know how executive compensation works."

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Unresolved issues

Not all shareholders and companies get along, of course,and many obstacles remain.

For one, activist shareholders of ExxonMobil accuse theoil behemoth of ignoring their concerns about globalwarming. Investors say the company trails BP, Chevronand other rivals in dealing with climate risks.

Last May, shareholders holding $120 billion, or 31%, ofExxonMobil stock, voted for a resolution urging the com-pany to reduce greenhouse gas emissions.

Several explosive issues loom, including a long-runningand divisive battle at the SEC over rulemaking on share-holders' access to the proxy. Proxies, the main arsenal of

shareholder activists, are the written authorizations thatgive shareholders the power to vote on issues at annualcompany meetings.

More shareholders also are debating whether to divesttheir holdings from global companies with business tiesto countries such as Sudan and Iran, accused by the StateDepartment of sponsoring terrorism.

Business leaders such as the U.S. Chamber's Hirschmann,though, are cautiously optimistic that companies andshareholders will slowly forge ahead on proxy issues.

"We may not agree with everything, but most boards areeager to engage with shareholders," he says. "This dia-logue is very helpful."

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American CEO’s take on EuropeBy Del JonesUSA TODAY

Europe vs. the USA. Which economic system is mostviable in a global economy? European Union countrieslean toward socialism, with a larger safety net. The USAleans toward capitalism and opportunity. Which is best?USA TODAY corporate management reporter Del Jonesasked Stuart Graham, 61, the American CEO of Skanska,a construction giant based in Stockholm and a companylarge enough that it would rank about No. 125 on theU.S. Fortune 500.

Q: Six-week vacations, 35-hour weeks, universal healthcare and day care, paid maternity leave, paid sabbati-cals. It sounds grand, but how can Swedish companiesbe so generous and still compete?

A: France and Germany have suffered from their overlygenerous employment and labor laws. Sweden, on theother hand, is prospering despite long vacations and itssocial net. I honestly don't know the answer, but this isprobably the most technologically connected country inthe world. Swedes take a longer-term perspective, andthat investment in the future pays off in productivityand performance. The corporate tax rate in manyEuropean countries is high, but in Sweden it is lowerthan in the U.S., although the individual tax rate is veryhigh (up to 60%). There is less incentive to distributeearnings and dividends, so companies invest in thefuture of the business.

Q: You're saying that Sweden has no disadvantage?

A: Oh yeah. The Social Democrats were defeated (in2006) for the second time in the last 70 years, and thatis because there is a belief here that the social systemhas some negatives and needs to be adjusted for theeconomy to be stronger. They know that global compe-tition is only going to get more intense. Sweden is acountry of 9 million people. Its big companies can't sur-vive selling at home. Eighty percent of Skanska's busi-ness is outside of Sweden.

Q: The trend here is going the other way, with theDemocrats taking control of Congress and in strong con-tention for the White House. Is there pressure inSweden to make its business climate more American-like?

A: It wouldn't be popular in Sweden to characterize itthat way. But Sweden is a member of the EU, and thereare basically no borders regarding competition. Laborcan move freely; it's easy to trade goods. That aloneforces countries to be more competitive. The EU block isalso competing with China. Europe is the oldest ofWestern economies. People look for more leisure timeand support from the government. The U.S. is less so,but China is a lot less so.

Q: In 20 years will the U.S. business environment bemore like Europe's or vice versa?

A: With prosperity comes more responsibility towardsyour people and the world in general. U.S. business isevolving, taking more responsibility for its impact on theenvironment, even ahead of government regulation. TheU.S. will evolve toward a better safety net. The future isthat there will be no letup in the demands of sharehold-ers for financial performance. There will also be noletup in the demands of society that businesses behaveresponsibly. Management just has to get better.

Q: OK, let's cut to the chase. You have children whohave recently reached adulthood. In what country,under what system, would they have the greatestopportunity to succeed and/or be happy?

A: Given the size of the market, given that my childrenare American, the greatest opportunity for them is inthe U.S. The track record of the U.S. in providing oppor-tunity — nobody has matched it for 50 years. Look athow the immigrants to the U.S. have prospered.

Q: The flood of illegal immigrants into the USA is proofthat our system is better?

A: The same problem exists in all of Western Europe.People are looking for a better life. Obviously, it's easierto come to the U.S. from Mexico. If you're in CentralEurope it's easier to come to Western Europe. You canmove from Poland legally because there are no bordersin the EU for labor, and something like a million Poleshave gone to Western Europe. Now there is a laborshortage in Poland where the economy is booming. Theprice of labor is going way up, which means that peoplewill be moving back.

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Q: Skanska hires all over the world. Does it hesitatemore to add workers in Sweden because it's hard to firethem?

A: It's more expensive, not more difficult, because lawsrequire more compensation. If I add a thousand morepeople and the cycle turns down, it's going to cost me alot to get rid of them. However, that is a moot pointbecause we have an acute shortage of constructionworkers in Sweden. We're trying to entice people tocome here.

Q: Where in the world do you find the most productiveworkers with the best work ethic?

A: We have 12,000 projects, so I see vast differences inproductivity. But I can't attribute it to a country or a cul-ture. I attribute it to the management on a project.Productivity is not the willingness of the workers buthow good and demanding the supervision is.

Q: It must be awkward to have labor union members atSkanska's board meetings.

A: There isn't an us-and-them mentality. It's the oppo-site. The board members representing the employees aresupportive of the company and management. In the fiveyears I've been CEO we have not had one issue wherethe union members and the rest of the board were atodds.Q: Norway has a law that requires 40% of directors bewomen. Would that be OK too?

A: There have been voices agitating for that in Sweden. Ibelieve in diversity, but not quotas.

Q: Which country worldwide has the best health caresystem?

A: If I had the answer to that I could make a lot ofmoney, or do something smart for our company. I look atthe health systems in various countries. I must confess, Idon't know what is the best system. No matter whereyou go there is a big problem. It's a complex issue and sointerrelated with the culture, tradition, the laws of thecountry. They all have major flaws. The U.S. ultimatelyneeds to provide health care for all Americans. InEurope, they have universal health care, but with draw-backs. Your choice is limited; you're inconvenienced andseverely restricted. If I had to wait five to six months forsurgery, I wouldn't like it much.

Q: Do you make less than if you ran an $18 billion com-pany in the USA?

A: I made $3 million last year at today's exchange rate.The dollar is falling, so it looks better than it actually is. IfI ran a company of this size in the U.S., it would be signif-icantly higher.

Q: At least you don't have to deal with all the negativepublicity that high-paid U.S. CEOs put up with.

A: Scrutiny is more intense in Sweden. In the U.S. theyobject to obscene payouts, $60 million, $120 million.They don't make noise about a guy who makes a crum-my $10 million or $20 million. In Sweden they object toeverything.

Q: The USA is not very popular globally. Any advice forU.S. companies operating abroad?

A: Europeans respect and admire the U.S. economicprowess and success. We are unpopular because of for-eign policy and political reasons. People don't view busi-ness nationalistically, although big business has a badimage to the man on the street in all countries. What Iwould advise any American is not to come to Sweden orany country and try to tell everyone that Americanshave all the answers. Even if you go from New York toWest Virginia, I don't think it's a good idea to tell every-body how smart you are and how dumb they are. It'shuman nature that people will resent that.

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Eco-marketing a hot topic foradvertisers at Cannes

By Laura Petrecca and Theresa HowardUSA TODAY

CANNES, France — Going green is red hot in the adworld. Paint companies, laundry-detergent makers, soft-drink producers and locomotive sellers are among amultitude of marketers trying to position themselves asenvironmentally friendly.

Green "has gone mainstream," says Allen Adamson,managing director at branding agency Landor Associatesand author of BrandSimple. "Everyone has jumped onthis bandwagon."

And that has made "eco-marketing" a hot topic of dis-cussion here at the Cannes Lions InternationalAdvertising Festival, the industry's biggest global tradeand awards show.

It's also on the official agenda. Today, former vice presi-dent Al Gore will be here to speak on what advertisersand ad agencies can do to "raise awareness of the cli-mate crisis around the world."

Gore's seminar follows a discussion on Wednesday host-ed by global ad giant Havas that examined good and badattempts at green marketing.

Also here, the non-profit ACT Responsible group of adand media pros sponsored an exhibition of sociallyresponsible ads with a large section for green ads.

On a lighter note, Alice Audouin, sustainable develop-ment director at Havas Media in France, will lead a groupof ad industry women in swimsuits on a cleanup of litteron the Cannes beach on Saturday. She says they aim toshow that social responsibility can be fun and even"sexy."

The popularity of Gore's global-warming documentary,An Inconvenient Truth, along with an increased emphasison climate issues in schools, are two huge factors fuelingconsumer interest in the green movement, Adamsonsays.

That has companies taking action, from buying alterna-tive energy credits to reducing plastic packaging todonating loads of money to Earth-friendly charities. LeviStrauss introduced Levi's Eco jeans last year, made from100% organic cotton.

They're also spending to let people know about theirgoods, services and events that relate to the environ-ment. In the three months ending June 14, marketersshelled out a combined $18 million on green-focused TVads, according to TNS Media Intelligence. Those adsranged from Earth Day sales promotions to commercialsfor hybrid cars.

While an environmentally sound stance is good forEarth, it doesn't hurt a marketer's brand reputation —and increasingly it is a path to higher sales and profits.

About 35 million Americans regularly buy green prod-ucts, according to research group Mintel.

And research shows many folks will pay more for eco-friendly goods or services, says Adamson.

Adamson and other marketing experts warn, however,that when it comes to touting an eco-friendly message,marketers had better be ready to back it up — or facebacklash from consumers.

"You've got to show that there's substance behind whatyou say," says Hamish McLennan, global CEO of adagency Y&R, which is hosting the Gore seminar."Otherwise, it could backfire."

Dozens of marketers — including oil companies andautomakers — have been criticized in the media and onblogs for what appears to be more hype than action onthe green front. There's even a term for playing up aneco-friendly stance when a company may actually bedoing, on balance, more harm than good to the environ-ment: "greenwashing."

Green stance doesn’t hurtcompanies’ rep, sales or profit

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Joanne Bradford, chief media officer at MSN, says she iswell aware that tying with a green issue comes withscrutiny. Microsoft's MSN is lead media sponsor of theupcoming series of Live Earth concerts to raise aware-ness of global warming.

Microsoft has touted its success in reducing fuel emis-sions, and Bradford says her team has worked to cutpaper use. But she is open about the limitations on aperson or company going completely green: "We're justtrying to be thoughtful about it. There are all sorts of lit-tle things that you can do every single day."

In posting online content, MSN also has to balance itsgreen focus.

"Whether you're buying natural ingredients for your skincare or deciding what type of fuel economy you wantwith your car, we want to provide you with that infor-mation," she says. "But I don't think you'll see everythingwe do be green. It's not going to be the all-green autochannel, because people want options."

Others greening their image:

uNedbank. In one of the most direct examples of greenmarketing, this South African bank took the Grand Prixin the outdoor ad competition at Cannes this week for itsPower to the People billboard. The sign has 10 solar pan-els, each generating 135 watts of electricity, that arepowering the kitchen of a nearby primary school.

uGE. It began its Ecomagination campaign two yearsago. The made-up word represents GE's commitment tospend more than $1.5 billion developing eco-friendlypolices and products, from clean coal technology toenergy-efficient washing machines and light bulbs, by2010.

The Ecomagination campaign of TV, print and Web exe-cutions, by BBDO in New York, will get nearly 100% ofGE's corporate ad budget this year.

"Ecomagination is a business initiative first and fore-most," says Judy Hu, general manager for corporateadvertising. "We aren't being charitable. We're doingsomething that makes good business sense."

uTimberland. The apparel and shoe company last fallbegan using shoe boxes of 100% recycled material andintroduced a so-called nutritional label, similar to foodlabels, that list such things as the shoe's environmentalimpact in areas such as renewable energy.

This spring, Timberland also added Green Index tags tofive shoe lines. The tags give environmental ratings foreach based on the impact on the climate of making theproduct, chemicals used to make it and its organic,renewable and recycled materials contents.

uPepsiCo. It has made a companywide commitment toenvironmental action such as using more solar energy atits facilities, recycling water and purchasing renewableenergy credits that subsidize develop clean sources suchas wind power.

Pepsi is a sponsor for the July 7 Live Earth concerts.Concertgoers who turn in Pepsi containers at stores atthe concert venues get credit toward buying recycledproducts. For instance, at Giants Stadium in New Jersey,people can turn in cans and bottles for a messenger bagmade from recycled material.

uEMP. The Lithuanian electronics recycler won a SilverLion for media planning with a campaign encouragingpeople to turn in for recycling old electronics sittingunused in attics and garages.

EMP worked with Universal McCann to place old TVs onbuses, with a message about how much space theywaste.

The campaign also included e-mailing of videos showingfunny ways people get rid of old electronics. They gotsubstantial pass-along distribution and showed up onvideo-sharing websites.

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

1. Choose a company that you do business with on a regular basis. Examine their economic, social, and environ-mental policies. What changes might they make to one or more of these areas that would increase their socialimpact while preserving or increasing shareholder revenue?

2. Review USA TODAY and find a featured entrepreneur that has created a business model that most exemplifiesthe ideals of corporate social responsibility.

3. Review the “Today’s Entrepreneur” archives at: http://www.usatoday.com/money/companies. Which of thesefeatured entrepreneurs has created a business model that most exemplifies the ideals of corporate socialresponsibility?

4. Yaron Brook says, “Corporate altruism is not only destructive, it is immoral.” In light of Bill Gates’ recent call for"creative capitalism" that uses market forces to address poor-country needs and his decision to grant $306 mil-lion to develop farming in poor countries, what points might be made in support of Brook’s viewpoint? Whatpoints could be made against her position?

5. Why do businesses exist? What is the purpose of a business, or, ultimately, any economic system? Explain yourphilosophy.

6. At what point does “greenwashing” (the term for playing up an eco-friendly stance when a company may actu-ally be doing, on balance, more harm than good to the environment) become an impediment to overall businessperformance, and a reason for you, as an individual, to take your business elsewhere? Explain.

Future Implications:

1. Given the choice between government responsibility for bettering the social ills of the world and CSR, whichholds the most hope for a more just, peaceful and healthier future? Provide a solution that would utilize both.

2. Discuss the role that increasing affluence, changing social expectations and globalization will play in the impor-tance of CSR in the future. What other changes in business practices are likely to result from these issues?

3. Stuart Graham contends, “The future is that there will be no letup in the demands of shareholders for financialperformance. There will also be no letup in the demands of society that businesses behave responsibly.” Are thesetwo goals mutually sustainable? Why or why not?

4. In a speech at the World Economic Forum in Davos, Switzerland, Bill Gates called for a "creative capitalism" thatuses market forces to address poor-country needs that he feels are being ignored. "We have to find a way to makethe aspects of capitalism that serve wealthier people serve poorer people as well." To what degree should compa-nies with fewer resources and profits than Microsoft have a responsibility to address the social ills of the UnitedStates and/or the world? Debate this issue with your peers.

Discussion Questions:

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

1. Review each of the following issues on the Voices website at voices.usatoday.com : stem cell research, health care,and energy. Choose one of the topics and make recommendations for specific changes to that industry that wouldimprove its economic, social, and/or environmental policies, while preserving profitability.

2. After exploring the issue of sustainability at: usatoday.com/educate/college/voices/issues/sustainability.html,debate how businesses should balance the issue of icnreasing profits against the need for sustainability. Underwhat, if any, circumstances should profits be limited in the interests of ecological protection or social justice?

3. Viewing your college or university from a business perspective, what steps have been taken by the administration,faculty and/or students to promote environmental sustainability? Share the best solutions at:usatodayeducate.com/best_practices/going_green.cfm. What additional changes could be made to ensure the eco-nomic, encironmental and social sustainability of your school as an institution?

uCorporate Social Responsibility Initiative – The John F. Kennedy School of Governmentksg.harvard.edu/m-rcbg/CSRI

The Corporate Social Responsibility Initiative at The John F. Kennedy School of Government is a multi-disciplinaryand multi-stakeholder program that seeks to study and enhance the public contributions of private enterprise. Itexplores the intersection of corporate responsibility, corporate governance, public policy, and international devel-opment. It bridges theory and practice, builds leadership skills, and supports constructive dialogue and collabora-tion among business, government, civil society and academics.

uCSRwire – The Corporate Social Responsibility Newswirecsrwire.com

CSRwire is a leading global source of Corporate Social Responsibility news.

uBusiness Ethics – The Magazine of Corporate Responsibilitybusiness-ethics.com/

Celebrating its 20th anniversary, Business Ethics is now an exclusively online magazine offering information, opin-ion and analysis of critical issues in the field of corporate responsibility.

Additional Resources:

Voices Extension: