2012 in Retrospect: New Economy, Banking and Guns

Reflecting back over the past 12 months, a few things stood out as
significant events in the CSR world. Here is Francesca Rheannon’s look at the New Economy, banking and the gun trade as published in CSRwire:

Tipping Points On The Climate Front?

Cynics point out that it was only when Wall Street got walloped by Superstorm
Sandy that human-caused climate change finally was acknowledged by the
mainstream. Politicians like Mayor Bloomberg and Governor Cuomo made open
reference to it – and Bloomberg Businessweek featured an article, “It’s Global Warming, Stupid.” (Even
President Obama managed to say the “C” word – but only after he was safely
elected.)

But the climate talks in Doha, which took place a month after
Hurricane Sandy, failed to produce any binding international agreements, despite
the fact that climate change wreaked more havoc in 2012 than ever – on the heels
of the previous record set in 2011.

As one commentator pointed out:

For moral and educational reasons it is still important to call on
nations to act in these forums, but it is a serious strategic error to believe
that global climate summitry will deliver anything approaching a binding and
serious agreement to reduce emissions. These summits remain important because
they are setting policy on issues like financing for climate adaptation. But
they are not where we need to wage the fight for substantial emissions
cuts.

Instead, the fight is moving outside the U.N. framework.

Bill McKibben’s group 350.org has begun a financial divestment campaign modeled on the one that
helped bring down the apartheid regime in South Africa. Within one month, Go Fossil Free counted a victory in
Seattle — where the mayor sent formal letters to the city’s pension funds
directing them to divest from any investments in fossil fuel companies – and
chapters opened on 190 campuses, some of which scored some early gains.

But the real hope lies in spreading local movements to
challenge fossil fuel companies, from fledgling Arab environmental groups, to
coalitions between environmentalists, fishermen and homeowners fighting coal
trains in Washington State, Indian tribes and climate activists battling tar
sands in Canada, to a growing “glocal” movement against fracking that has slowed the practice in key areas like New York
state. (And, no, natural gas is not friendly to the climate.)
It seems the world’s people are waking up to the fact that moving the needle
back toward a livable climate will take their commitment to make it happen.

B-Corp Goes Big Time & Co-ops Get A Boost

New Economy business forms, like benefit corporations and cooperatives, saw
their profiles boosted in 2012.

The B-Corporation idea made major headway this past
year. It was featured in The New York Times, The Guardian, The
Atlantic and other large media, and mentioned favorably by Bill
Clinton.

By current count, 664 companies in 23 countries and 60 industries have joined the B-Corps bandwagon,
including some big ones like Ben and Jerry’s, Etsy, Cabot Creamery (which is also a cooperative), Sustainable Harvest and
Patagonia. Nine U.S. states had adopted legislation friendly to benefit
corporations as of August 2012, with more considering it.

And the corporations-with-a-conscience model is working, despite a sluggish
business environment. B-Corporations in the U.S. have increased hiring 5
percent, outperforming the larger economy.

The U.N. designated 2012 “The Year of The Co-operative.” Like benefit
corporations, cooperatives are doing well, despite tough economic
times, growing at roughly twice the rate of the larger economy. They
comprise a major portion of global food production, including in the U.S., where
80 percent of dairy production comes from cooperative enterprises, both organic
and conventional.

But they are not just in agriculture – they cover industries as disparate as banking (Rabobank) and manufacturing. The 300 largest cooperatives are
reported to generate total revenues of $1.6 trillion.

Bank Robbery, The LIBOR Way

Being a cooperative doesn’t mean that you can’t get caught up in scandal,
however, especially when the scandal embroils your entire industry. The LIBOR
scandal touched Dutch cooperative Rabobank,
although one could find some solace in the fact that it dismissed several employees well in
advance of the scandal breaking over concerns about manipulation of
interbank lending rates.

Such manipulation of rates impacts everything in the financial industry, from
derivatives trading to mortgages industry and municipal bonds.

It now seems, in fact, that no major banks will escape the scandal, as
manipulation was “routine and widespread,” according to the British Financial
Service Authority. Investigations have already taken scalps, notably the CEO of Barclays, who was forced to resign, and Swiss
bank UBS, which will be reaching into its coffers for $1.5 billion in fines to
regulators in the U.S., Switzerland and the U.K. But it won’t be known at least
until next year what the real impact of the LIBOR shenanigans has been – or what
the fallout will be.

Sandy Hook Puts Spotlight On Guns

The real Third Rail of U.S. politics (Social Security can’t claim
that mantle since President Obama and Congress signaled readiness to subject it
to major cuts) might just be finally losing some of its power in the wake of the
shootings at Sandy Hook elementary school in Connecticut on December 14th.

Gun control has long been off the table, in spite of the fact that in the
U.S., more than 30,000 people die from gun violence annually. That’s probably
because U.S. firearms companies are hugely lucrative. They made almost $1 billion in profit in 2012. They
employ an army of lobbyists – many of them former U.S. officials and lawmakers –
ensuring that the fox guards henhouse when it comes to regulating guns. But
after Sandy Hook, the political climate might be beginning to change, as the
clamor to regulate assault weapons, at least, strengthens.

The road to reform won’t be easy, however.
The gun industry has been growing almost 6 percent a year since 2007, even
while the rest of the economy tanked. And gun sales surged after Sandy
Hook, driven by consumer fears that more regulation is on its way.

And the dots have not yet been connected in the public mind between domestic,
civilian gun sales and the multi-trillion dollar global weapons business.
According to Andrew Finestein, author of THE
SHADOW WORLD: Inside the Global Arms Trade, the global trade in weapons
is less regulated than the global trade in bananas. And even where regulated, as
in arms embargoes, laws are not enforced or punished. Of 502 violations of UN
arms embargoes, only two were prosecuted and one resulted in a conviction. He
continues:

The profit motive behind the global arms trade is absolutely crucial.
This is a business that is about big, big money. The trade contributes around 40
percent of all corruption in all global trade. So its impact on countries, on
governments, on ordinary individuals in terms of the economic opportunity costs
are absolutely massive.

Human rights advocates like Code Pink are taking up the issue. It’s one that
should make it onto the CSR roster in 2013.

Source: CSRwire