The Obligatory Year-End Post

Apologies to my handful of loyal readers (Hi mom!) for not posting in so long! Being in retail, every part of the business heats up as we enter the Holiday period. Add to that all the typical “year end” business (budgets, next year’s goals, etc.) and the annoying tendency for all CSR events and conferences to be scheduled in Q4, it’s been tough to keep up.

But today I find myself on a plane (yet again, but this time for an extended holiday break) with some time to reflect. It’s been a full year for me – one that marked a significant amount of change, opportunity and accomplishment. I do feel like I’m laying the groundwork for some very exciting and challenging work ahead, but I want to acknowledge some of 2010’s highlights.

Net Impact – The 2010 Annual Conference in Ann Arbor, MI was simply incredible. From inspirational keynote speeches by Gary Hirshberg to Majora Carter, this year’s content was top-notch and continues to move me to continue in CSR. And as a Net Impact board member, I’m privy to some exciting information that I truly believe will help launch this organization to the next level. Liz Maw is an exceptional leader and I am thrilled to be part of the team. Everyone should stay tuned to what Net Impact has in store and make an effort to attend the 2011 conference in Portland, OR – the first to be held in a convention center!

HERproject – Our partnership with HERproject has already proven to be one of the most fulfilling initiatives I’ve had the privilege to work on. Attending the kick-off meeting at a factory in Vietnam this fall was an uplifting experience and I’m so excited to see the positive impact I know this project will have on the lives of the women workers in our supply chain.

Playing Professor – I had the chance to speak to an undergraduate business class on CSR at UC Berkeley and left inspired by our next generation of business leaders. These students certainly didn’t hold back any tough questions and weren’t afraid to dig deeper when I gave unsatisfactory answers! These kinds of events not only keep me on my toes, but also help me understand the shifting expectations on companies’ CSR strategies.

Engaging our Executives – Much has been made of the need to engage a company’s executives to gain “buy in” for CSR strategies, so I was glad to have the opportunity to spend half a day with some key executives and CSR experts. The rich dialogue helped to inform our CSR strategy and helped me understand where this work can connect more significantly to our business objectives.

Engaging our Employees – I was invited to speak at our quarterly all-employee meeting last week, something that’s usually reserved for our senior-most executives. Despite my nerves (A live audience of 800, while being simulcast to offices around the country – with our C-level executives seated in the front row!), I managed to make it through the presentation without fainting or falling. And since the presentation, so many employees have reached out to say how proud they feel, working for a company that invests in our CSR initiatives.

Wool Farming – I never thought my job would take me to visiting wool farms in Australia, but learning about more sustainable wool practices was definitely an eye-opening experience. This education helped to turn our company around on a critical issue and allowed us to take a leadership position on a topic that previously had been a challenge for us to fully understand.

It’s been a busy year and I’ve been a mediocre blogger, but I’m looking for more great things to come in 2011. I’ll probably add being a more prolific blogger to my list of New Year’s resolutions, but until then, I’m going to enjoy the holiday break and I hope you all do, too!

Sustainable Wool Farming

Or ... who'd have ever thought my career would put me in such close proximity to sheep?

A few weeks ago, I went to Australia and visited several wool farms that practice sustainable land management. I learned all about the dangers of over-grazing, how both summer and winter native grasses help sustain food supply throughout the year, breeding techniques that eliminate the need for certain chemical treatments, the benefits of combining a flock of sheep with a flock of cattle (or a few alpaca!), natural ways to reduce soil erosion and that you don't call paddocks "fields."

In contrast to one of the farms we visited, the neighboring field used conventional techniques, including chemical pesticides and infrequent paddock rotation. The differences in the two fields was staggering. One was lush, with knee-high grasses and the other had only little shrubs and very short grasses.

The visits were very interesting and I learned a lot more than I ever expected to. My visit was initially to explore animal welfare issues in the wool industry, but took a truly educational turn once I had the chance to meet with farmers who are committed to improving the land they inherited from their fathers.

Coming into the trip, I didn't realize that the farms were family-run businesses, often passed down through several generations of farmers. At each farm, we were warmly greeted by the farmer, his wife and their adorable children. Over coffee or tea, we discussed issues like sustainable farming, wool prices, yarn quality and animal welfare. Then, we'd have a chance to actually see the paddocks, the sheep and field conditions.

The people I had the fortune to meet were so welcoming and open and generous that I feel very lucky to have spent time with them. For each of the three farms I've visited, it's clearly a family affair with wives and kids contributing to the overall well-being of the farm. It's actually a very idyllic lifestyle and one that's much simpler than the faster-paced city life I'm used to.

When we discuss wool and garments at work, we really don't discuss the human element of the farmers who toil away day after day and whose entire livelihoods depend on raising high quality sheep. We also don't get the chance to see how sustainable farming techniques can help replenish a countryside that has been exploited for generations before - to see how a new way of thinking is turning the land back to a lush, grassy landscape. And we certainly cannot see how much the farmers truly care for their flock and how animal welfare is an important element of how they run their business.

Health Enables Returns

Thursday was one of those days that reminds me why I love my job. I spent the day in a factory outside of Ho Chi Minh and we kicked off a new initiative with the factory: HERproject. An initiative of BSR, HERproject uses a factory-based peer-education model to improve women's health outcomes.

Essentially, factories invest in health education so that female factory workers gain a better understanding of reproductive health, nutrition and sexually transmitted diseases, among other health issues. In turn, factories experience lower absenteeism rates, reduced turnover and higher productivity, thanks to healthier workers.  And investing in women has impact beyond just those who experience the health training. Women take what they learn, apply it to their families and help to uplift entire communities.

I spent the day with factory management, BSR staff, representatives from our buying agent and the local Vietnamese NGO that will be delivering HERproject training and we discussed the plan for the upcoming year. It was simply one of those meetings where everyone walks away brimming with hope and excited for the possibilities.

After the meeting, we had a chance to tour the factory, meet some of the workers who would be participating and discuss additional outstanding issues. The factory tour also proved illuminating because it is a very well-run and organized facility.  It's one of the nicest factories I've ever visited, so I'm glad we've chosen a high-performing partner to launch this initiative with.

My company is proud to invest in this project and I feel lucky that I got to participate in the kick off.  In addition to this facility in Vietnam, one factory in Bangladesh is also implementing HERproject with our sponsorship. As we monitor the performance of these projects, I'm hopeful that we will be able to demonstrate both health benefits and business benefits so that we can continue to launch similar initiatives with other high-performing garment factories in our supply chain.

Moving Beyond Social Compliance

Most companies, even if they do not have a "CSR department" have a program in place to monitor social compliance in their global supply chains. For these companies, it is important to protect their brands' reputations by ensuring that the factories manufacturing their goods, often in developing countries, respect workers' rights, pay legal wages and abide by environmental legislation. It's also often from these departments that companies develop a more holistic CSR strategy.

I've spent the past two days in Ho Chi Minh City at the Better Work Vietnam International Buyers' Forum.  The Better Work program is described as:

"... a unique partnership between the International Labour Organization (ILO) and the International Finance Corporation (IFC).  It unites the expertise of the ILO in labor standards with that of the IFC in private sector development."

That's not a very telling description, but basically it's an effort to develop a sustainable, industry-wide mechanism to promote stronger industrial relations and good working conditions for garment factories in targeted countries (Vietnam, Cambodia, Jordan, Haiti).

Today, apparel retailers have different codes of conduct that they expect their contract factories to adhere to as a condition for doing business. To ensure that these factories are upholding the expectations expressed in these different codes of conduct, retailers employ auditors (either company employees or third-party audit firms) to visit factories and check conditions against their respective codes. With many retailers sharing the same factories, you can imagine that factories are visited dozens of times each year by auditors and out of each visit comes a list of "corrective action plans" for the factory to implement in order to remain in good compliance with retailers' codes.

This approach creates an environment where factories seek to solve specific problems in preparation for the next audit, but they may not take the time to understand root causes of non-compliance. Instead of understanding why they're unable to control overtime hours, factories may look for short-term solutions in order to "pass" the next audit.

The Better Work program seeks to shift the dialogue away from "auditing" and "monitoring" to truly finding long-term, sustainable solutions to poor factory working conditions.  In addition to conducting factory assessments (similar to a typical audit, but much more detailed and thorough), Better Work provides factories with consulting services and training (both for management and workers) in order to build factories' capabilities to manage working conditions and industrial relations.

Furthermore, retailers that subscribe to the Better Work program, agree to stop auditing factories and rely instead upon the Better Work assessments for insight into factory working conditions. This alleviates the factories from repetitive auditing and the International Labor Organization provides a credible approach that provides companies with the confidence that factories are being held to internationally accepted labor standards.

To me, it's a win-win situation, but these past two days have highlighted some challenges to broader adoption of this approach. Companies have had social compliance audit programs in place for decades and some are unwilling to let go of their own programs. People who represent companies and auditors have a vested interest in seeing the current environment prevail (They may fear for their jobs.), so they're not necessarily interested in promoting an industry-wide practice. Companies insist that their standards are stricter than the ILO standards and are unwilling to compromise on some points in order to support the Better Work framework.

The Better Work program has its work cut out for them, but I'm hopeful that retailers will embrace this approach more fully and the industry can move beyond the never-ending cycle of social compliance audits toward an internationally accepted, industry-wide system that focuses on the most important goal: improving the lives of garment workers.

The Independent, Third-party Factory Audit

We employ a third-party social compliance audit firm to conduct social and environmental audits of our factories. In some cases, the purpose of these audits is to check our primary auditor's performance and in others, we rely entirely on these third-party audits. Through using a third-party audit firm, we aim to introduce a neutral party to avoid conflicts of interest and to ensure that we bring in an impartial perspective that does not have a financial stake in our relationship with the supplier.

On Friday, I accompanied our third-party audit firm for a shadow audit in China. It was the first time I'd visited a factory with a neutral party (instead of a company-appointed representative or a company employee) and it proved to be fairly educational.

From the outset, the tone of the visit was very different. Usually, auditors have a pre-existing relationship with factory management. The auditors have been to the factory before, they've worked together over the years and it's a collegial, if not friendly, relationship. With a third-party audit firm that has no previous relationship, the visit has a much less friendly tone.  It's strictly professional and both sides clearly are assessing each other throughout the visit.

The factory staff seemed much more nervous than on other audits I've shadowed. It could have been because this was the first time we had ever asked the factory to be audited, or it could have been my presence, representing a customer. Whatever the case, the entire day took on a much more formal environment than I was used to.

When it came time for lunch, the factory management team offered to take us to lunch, but our audit firm steadfastly refused. Typically, I will break bread with the factory managers to build our relationship and to discuss matters like production levels, hiring challenges, compliance issues, etc. in a more casual setting. Our audit firm has a policy to have lunch on its own, again to avoid any conflicts of interest.

And in the closing meeting, when we typically discuss next steps, corrective action plans and timing for implementation, we ended up pointing out the violations we'd found and leaving it at that.  We cannot guarantee that the audit firm will return to ensure that the corrective action plans have been implemented. In some cases, companies will send their own representatives to ensure follow-up. In this case, we could only say what we'd found and the conversation never turned to remediation or true improvement.

Friday's visit really highlighted for me some of the shortcomings of the third-party audit system. I still believe they play an important part of any social compliance program, but to rely completely on them would probably not truly work toward improving factory workplace conditions.

Our CSR Summit

Earlier this week, we hosted a CSR brainstorming session to help three of our C-level executives understand some possibilities of infusing our brand with a more "socially conscious" angle. We invited in several CSR experts and a few CSR practitioners from other consumer-facing companies.

Prior to the event, I spent several weeks trying to convince people from my network to spend a few hours on the Tuesday morning after Labor Day with us in New York City. Understandably, people didn't commit to flying across the country for our meeting, but we did manage to get some strong representation from the New York area.

I also spent time in healthy debate with a marketing VP, whose role is to ensure that we project the appropriate brand image to external guests, including the type of food we have catered, the vases of white hydrangeas placed throughout the room and the color of the foam core (silver or white) we were allowed to use behind flip charts! She wanted bottled water, I insisted we get pitchers. She wanted to use a beautiful trash receptacle, I suggested recycling bins. In the end, since I'm not based in the New York office, she got her way. Despite saying she'd honor some of my sustainability requests, our meeting had bottled water and no recycling (among other things). As expected, several of our CSR guests commented on the "opportunities" to host a more sustainable meeting.

But the meeting itself went better than expected. We had a very robust dialogue, surfaced some exciting possibilities and I think everyone in attendance felt inspired by our brand and its potential connections to the planet and to communities.

The problem we have now is how do we take these ideas and this momentum and bring it to life? My job is to continue to push this work forward, but we don't have the appropriate resources to accomplish everything we discussed. Our Chief Supply Chain Officer pledged that he would debrief with his executive peers and our CEO to get a better sense of priority and I hope we'll then be able to work on a strategic plan to put some of this work into action!

Instead of Stating the Case Against, How About Re-defining the Case For?

Warning: I’m on the defensive.

Yesterday’s Wall Street Journal ran an article called “The Case Against Corporate Social Responsibility” that purported CSR as dangerous for society because it presumes companies are wrong to take on social welfare issues. These issues, the article argues, belong under the purview of government or civil society.

Since I work in CSR, it should come as no surprise that I find this argument flawed. I agree that social welfare issues fall under the jurisdiction of governments and civil society, but why is self-regulation a bad thing? In some cases, companies that self-regulate can set an example for how governments can introduce effective and practical government regulation. In others, CSR as self-regulation is in direct response to the concerns of civil society – the exact response that this article argues is “irrelevant” for companies to pursue. And yet if companies ignore these concerns, they expose themselves to risk - risk that can have a material impact on company operations and profitability.

I’m also troubled by the presumption that pursuing private profits or public interests has to be mutually exclusive. It’s not a zero-sum game and companies that want to be profitable often have to take into account how public interests impact their operations. At the risk of sounding like a cliché, there really are win-win situations.

But you’ll probably be surprised to hear that I actually agree with a lot that the article posits. The author describes a few examples of cases where company interests are aligned with public interest: fast-food chains expanding into healthier food markets, the development of fuel-efficient automobiles. The article characterizes these examples as cases where positive social impact is a by-product of a company singularly pursuing profit. In my mind, these are great examples of how managing CSR strategically has led to more innovation, market capture for companies and greater shareholder value.

It’s my opinion that companies can manage CSR strategically in order to become better-run enterprises, in order to recognize emerging risks and stimulate innovation in order to stay competitive in a dynamic marketplace. These are not concepts that are at odds. It’s only when companies mis-manage CSR or don’t seek alignment between CSR efforts and overall company strategy that they seem to sacrifice profits for social well-being or vice-versa.

I don’t know many CSR managers who advocate for companies to abandon their profit motives in order to chase the “greater good.” We all know that we’re working for companies with responsibility to shareholders. Our work aims to find the impacts our companies’ core business competencies and operations have on society and the environment and either mitigate these impacts or transform them from potentially destructive to productive. This approach does not require sacrifice – just a slightly more enlightened view of the interplay between business and society.

The Travel Bug

Friends, I apologize for my lack of posts, but I've been all over the place during the past few weeks. Part of what I enjoy most about my job is the opportunity to visit different parts of the world and learn about communities and cultures to which I've previously had no exposure. But when you have those moments when you wake up and your first thought is, "Wait, what country am I in again?" it may be a bit too much.

So, to make writing this post easier, I'll organize my recent travels by location:

Istanbul, Turkey
After a long night of flying, I arrived in Istanbul with several of my Supply Chain colleagues for a vendor summit. We've been working with more and more vendors in the Middle East and Mediterranean region, so we decided to host a formal day where we could get to know each other better.

Representatives from about 30 vendors, suppliers and partners showed up and we gave them a thorough overview of our business, our brand and our supply chain strategy. I spent some time discussing our factory compliance program and shared with them the CSR vision and strategy I've been working on. It's not quite "approved" yet, but it was great to explain to our partners that CSR will be more than just compliance. Our company will be looking for ways to create value from CSR and it's essential our partners understand where we're going.

Casablanca, Morocco
After the vendor summit, four of us traveled to Casablanca and visited a number of factories around Casablanca. We've already been working with one of the factories, but this was an opportunity to tour new factories to see whether or not they have the capability to work on our product. From my perspective, I had the chance to see factory working conditions firsthand and provide my input into potential suppliers.

Furthermore, meeting with Moroccan factory owners gave me the chance to dive into a strange Moroccan labor law with which I was pretty unfamiliar. The law has the potential to negatively impact overtime payments, and in extreme cases could be perceived as a form of forced labor. But because it's the law, we have to work with our suppliers to understand ways to make sure workers fully understand their rights.

Amman, Jordan
Continuing on our tour of potential factories to work with, we headed to Jordan to tour several factories. From a social responsibility perspective, I concentrated mostly on the topic of foreign workers - people who have come from other countries like Bangladesh, India and Sri Lanka to work in Jordan for several years. These foreign workers are especially vulnerable to discrimination, abuse and potential cases of forced labor, so it is important for us to learn more about how we can protect their rights.

Biella, Italy
After visiting factories, we headed further upstream and met with textile and yarn suppliers in Italy. For me, it was an education in seeing how yarn is spun from wool and how fabric is woven from threads. It was pretty fascinating and I learned a lot about the impacts that our upstream suppliers have.

One of the most interesting things I got to see was a fully automated dye house. Dyeing yarn can be one of the most toxic and environmentally unfriendly processes, but this particular facility had a state-of-the-art, computerized contraption that required only one person to operate the entire process. And thanks to technological advances, it not only limited human exposure to toxic dyestuffs, it also used less water to dye yarns and highly curbed the amount of effluent released by the process.

New York, NY
After a few days at home and back in the office, I headed down to New York to visit employees in our New York office. My main purpose was to meet with members of our Marketing team and to meet with a consultant, but I easily filled my time there with additional meetings on a variety of topics.

It's always good to meet with my colleagues face-to-face and a quick trip to New York is always worthwhile to build relationships.

My friends and family get excited when I talk about upcoming trips, but to tell the truth, I didn't have any time to do any sightseeing in all the countries I visited. Over the course of two weeks, there were only three days where I wasn't on a plane, and when I wasn't sleeping or visiting our partners, I was usually in a car or a van, traveling from one point to another.

I guess this means I'll have to go back to visit these countries and save some time to actually see some of the sights!

We Are the World

Everyone talks about the "global economy" and how business is linked with the various countries around the world - either as commercial markets or as sourcing markets. In all my CSR positions, I've had the opportunity to consider the world beyond my own country borders, but never have I had to dig as deeply into country information before my current position.

I sit squarely in our supply chain organization and am focused on helping the company consider entry into and exit out of different countries from a sourcing perspective. And I'm now in the middle of a "country risk assessment" project where I've been tasked with assessing the risks of doing business in those countries where we're currently sourcing and those under consideration.

It's an interesting project and I get to learn about countries like Mauritius and Jordan, but it's been a laborious piece of work as well. Each country requires several hours of research and of course there are many other pressing demands on my time. I've started to engage external purveyors of country risk analysis to see if I can streamline the research process and am now in the position of receiving approximately 20 e-mail newsletters a week that alert me to macroeconomic shifts in different countries around the world.

The problem with these research and information sources is that I simply don't have time to filter through the wealth of information out there. And most of these sources don't do a good job of narrowing down available information to make it easily digestible or relevant to my industry. My full-time job could be to sift through information about China, but unfortunately, I have other things to do.

As I pull these country profiles together for an upcoming meeting (one that's far too close on the horizon), a growing concern is how I'm ever going to keep these profiles current and how I will be able to manage ongoing communication of their contents to my colleagues. It's a weird responsibility, being the keeper of country risk information - and one that I'm not totally convinced plays to my strengths.

After all, how does one person stay abreast of all the economic and political developments in several dozen countries, while considering all the potential implications on our supply chain and business? There has to be an easier way!

The Holy Grail?

I've spent the past few weeks tweaking a new tool to rate our suppliers on social performance. It's never going to be "perfect," but it's at a point where I think it's workable.

Ever since before I started working in CSR, I'd heard social performance metrics described as "the holy grail." Professors grandly alluded to the possibilities of tying "hard social metrics" to financial performance and building a stronger business case for CSR. Of course, no one suggested that social metrics would demonstrate that CSR does not have business value. That outcome would simply mean the metrics were "wrong."

In any case, I don't know whether or not we'll ever get to the social metrics that hard-core CSR professionals and academics seek. What I do know, however, is that people in other parts of my company need an easy way to understand CSR performance and I need to develop something that gives us directional insight into social performance. As it stands, my metrics system doesn't provide an absolute grade. The important part is that it serves as a springboard for discussion.

And my point in introducing these metrics into our company vocabulary isn't to help our contract factories strive for perfection. When it comes to social performance, it's about continuous improvement and metrics can help describe relative performance between entities or over time. I just hope my business partners understand that I want to provide these metrics in a certain spirit - to cultivate ongoing feedback, dialogue and improvement.

Writer's Block

It's my own fault, really. In my previous companies, we've had robust Corporate Communications teams who managed the corporate website. In order to make any changes (large or small), requests had to funnel through this department and much strategic thinking went into whether or not the change(s) could be made and how it would impact the company's overall messaging and positioning.

In my current company, we simply don't have the same resources and making changes to our corporate website happens much more quickly and without the same level of thought or bureaucracy.

In the two years I spent in my last position, I joined a battle to elevate the "Corporate Citizenship" section of the website to the main navigation, arguing that today's customers and potential employees expect to see this information front-and-center. It's a debate that predated me joining the company and, to my knowledge, it continues after my departure.

So, I started campaigning early. I'm almost three months into my job and there's now a "Corporate Responsibility" tab in the main navigation of our company's website. It was a much easier and quicker response than I could have ever imagined. Now I have a bigger problem: there's no content!

Without resources to hire a writer, I've been trying to draft content for our website - something that authentically, yet succinctly describes our approach to CSR. I'm stretching to find verbiage that illustrates our genuine commitment without overstating our progress to date. I'm quickly reaching out to other parts of the business to get a fuller picture of initiatives that have been underway for years, before I joined the company. I'm trying to emulate our corporate voice and bring in elements that make this story unique to my company. And most of all, I'm trying to avoid writing the same thing I've written for my past two companies' websites and CSR reports!

So, naturally, I've taken a break from the drafting and turned to blogging for a bit. Hopefully, this little exercise will clear the cobwebs from my brain and allow me to tell our story (quickly!), so that visitors to our corporate website won't see the "under construction" message for much longer.

Who Are Your Champions?

When I was in business school, I read The Soul in the Computer for one of my CSR classes. What I got out of the book was that individual employees could bring their values to work and make change from within a company - and that it was important to identify and empower these employees in order to create change. The message seemed pretty elementary to me at the time, but after working in CSR for the past several years, the importance of this concept has only increased in my estimation.

If you ask most CSR practitioners, they'll tell you that one of their priorities is to "integrate" CSR into all parts of the business. Some will go so far as to say that they're trying to work the CSR practitioner out of a job. At one company where I worked, a Legal VP described CSR as "an insidious virus" that could spread through the company and take hold of all employees (This was meant to be a good thing!).

But it takes time to identify these change-makers and champions: people in traditional business functions who want to help with the CSR agenda and can help make decisions that are relevant to their particular functions. It's great when these like-minded employees approach you as the CSR practitioner, but I find that I need to plan time to proactively reach out to people who I sense are "of the faith."

The other day, I set up a meeting with someone who manages a very resource-intensive product. Without having ever met her, I simply sent her a meeting over Outlook, showed up to her office and explained that I was curious about her work. As we chatted, I asked about some of the potential environmental impacts and attributes of the raw materials that go into her product category and she lit up!

It turns out, she's passionate about environmental sustainability and had been thinking about these very issues, but never had anyone to discuss the topic with. We talked about some no-cost and low-cost ways to increase the environmental attributes of this product and scheduled some follow-up meetings with vendors to learn more. If our little covert operation is successful, we may be able to reduce one of the company's pretty big impacts, imbue the product with environmental attributes and enhance our brand from a CSR perspective.

Every company has people like my colleague and I see it as my job to start asking questions in order to find them. In many cases, people are simply looking for the opportunity to think these ideas through and will welcome the chance to test CSR-related projects. If you can find them, these champions can act like a special ops team - and lord knows every CSR practitioner could use more help and resources!

Kids, Pay Attention in Class!

No one in my b-school class would have confused me with a "quant jock." From the moment I stepped foot on campus, it was clear that I was a "poet" through and through. My liberal arts undergrad and my consulting-lite experience cemented my fate as the guy who would write the memo or design the PowerPoint slides in each group project. Leave the hard-core financial models to someone else.

My classroom experiences offered additional data points to show that I wouldn't ever be a corporate numbers guy. I sort of understood the concepts in my stats class and managed somehow to pass, but I knew in the back of my mind that I would never have to rely on unlocking an r-value to earn my paycheck. Queuing theory was an interesting exercise, but Gantt charts made me cross-eyed. I did, however, enjoy my corporate finance classes. Strange, but every data chart has outliers, right?

Fast-forward several years and I find myself in a position where I'm digging deep to remember details from classes I never thought I'd revisit again. Like the teacher trying to dissuade a 12-year old of the notion that he will never need to use algebra in "real life," I'm encouraging all you aspiring CSR practitioners in MBA programs to pay attention to these lessons!

In the past weeks, I've been pulled into conversations about AQLs and NPVs. I've had to seek correlation and statistical significance. My research has delved into countries' GDPs and labor optimization.

As a CSR practitioner, I'm effective at my job only as long as I understand the business I'm in. I find that I'm constantly trying to understand my business better, to figure out my colleagues' pain points and to find interesting social and environmental opportunities.

It's too easy to dismiss CSR as a fringe exercise that has no real relevance to the business, and in some companies, that may be okay. But if you really want to make a strategic difference - both to society and to your company - you'll go out of your way to learn the business, be conversant in important issues and create connections that others may have missed.

The Ethical Supply Chain

I recently returned from a trip to Hong Kong and China, where I had the opportunity to visit some of the factories that produce our goods. In today's economy, supply chains are global behemoths, with companies balancing, among other things, cost, quality, speed, trade preferences, technical capability, product assortment and "social and environmental compliance."

Obviously, it's impossible to maximize all the different variables, which is why companies also seek to diversify their sourcing base. You don't want to be beholden to one country and/or factory for all your goods. If anything happens to that country/factory, your company would find itself up the proverbial creek without a paddle.

My job is to help maximize the last dimension I mentioned in the opening paragraph: "social and environmental compliance." In my and other industries, "social compliance" is a common term. Many people are surprised to hear that most any western company with a global supply chain has a "compliance" organization. The tricky part for stakeholders is to understand what authority that "compliance" team has and how they approach this work.

Some companies take a "checklist" approach to compliance where they have a list of important attributes for their contract factories to follow. Typically, this includes a no child labor provision, no corporal punishment and paying workers. These companies are minimizing the risk that's inherent in sourcing from developing countries.

Other companies encourage their contract factories to "own" social responsibility and work with them to provide management and worker training. They focus on building socially responsible practices into factories' management systems and seek collaborative partnerships with local civil society organizations to keep all parties honest.

Not surprisingly, more companies follow the former model than the latter.

I had the chance to only visit three factories during my trip to Asia and I was pleased to see that they were all pretty good from a social and environmental perspective. Two factories had pretty robust programs where they self-monitor for social and environmental issues. They had stated philosophical approaches to social responsibility and one had even developed a set of standards that it hoped would be stricter than local law or any of its customers.

In thinking through my own company's approach, we definitely fall between the two extremes I describe above. By no means are we doing the bare minimum, hoping that social and environmental risks will never rear their ugly heads. But we haven't evolved to the point where we are actively building management systems in place for factories to embrace and own social responsibility. It's a journey that takes time and an evolution that requires resources.

I'm lucky that the executives I work with "get it" and support me in my efforts to elevate the company's ethical sourcing efforts. Would I consider my company a leader in the ethical supply chain? Not yet, but if I have anything to do with it, we'll get there.

The Ratings Game

Last week I had the chance to meet with several corporate CSR leaders and in many conversations, the CRO's annual list of "100 Best Corporate Citizens" came up. Like every other list that purports to rank companies based on CSR, differing viewpoints and minor controversy always arise.

When I mentioned the list last week (usually to congratulate a colleague whose company earned recognition on it), I heard several comments, including:

• "You know how it is. It's a game you've got to play and hope to influence."


• "When [company name] is in the top 25, you have to wonder how credible the list is."


• "Well, it means something only if you agree with the methodology, which I really don't."

Usually, these comments were accompanied by a roll of the eyes, a shrug or a dismissive noise.

In my last two CSR positions, I worked at companies that appeared on the list and part of my job was to furnish SRI investment firms with information that would help them provide accurate and timely information about our company's CSR practices to their clients. Since the CRO list gathers its research from such an SRI firm, I served as the point of contact to provide them with information about our company's efforts.

And while I agree with my fellow CSR practitioners who feel that these rankings create unnatural competition and cannot possibly provide an apples-to-apples comparison of companies' CSR programs, I do believe they can have value.

As one of my colleagues said last week, "At least it gets our CEO talking. He's mentioned it to investors and other business partners." It's a clear and easy proof point for executives to drop in a conversation. It can serve as a "measurable" way to validate the hard work of a CSR team. It can also serve as a framework for a company to organize, build and communicate a CSR program. (Although I wouldn't recommend using the last bit as a driving force for a CSR strategy.)

In the end, I truly do congratulate CSR leaders whose companies appear on this and other CSR rankings list, but I always remain skeptical of where companies are placed in relation to each other, especially when a company can jump 20 spots in either direction in the course of a year. But as long as they encourage companies to continuously improve upon their stated missions to help people, communities and the planet, I'm all for it. Even if it may be an artificial motivator.

Partnership Groundrules

I've spent the past several weeks trying to figure out how exactly we should be working with our third-party supply chain audit partners. Part of my responsibilities will be to make sure all the factories around the world that manufacture our products respect human rights, labor rights, communities and the planet's natural resources.

I used to work at a company where we had a very big, effective team that would visit factories on a daily basis. Not only did they conduct factory audits to ensure that they were upholding the company's standards, but they also ensured that factories followed up on corrective action plans and worked toward continuous improvement. At my current company, we've decided to contract with two providers of "social compliance."

The benefits of using third-party auditors is that it can be less expensive and time-consuming than building up an internal team, third-party auditors can leverage expertise and relationships from working with other customers and many of these auditors are certified by internationally respected NGOs.

The biggest challenge I've discovered with working with third-party auditors is that they don't have skin in the game. They're required to deliver audit reports, but they're don't necessarily have the incentives to follow up with factories or to do extra work to improve factory working conditions.

With that said, I don't think it's a lost cause. I'm realizing that we have to be crystal clear with what we expect as follow-up to a factory visit and we have to create mechanisms that make our auditors accountable for remediation. We need to figure out ways for our auditors to share our goals and to "own" the responsibility of factory improvement.

So, I've taken a stab at some standard operating procedures, which I hope will get us closer to this goal, but I'm not sure how well-received they will be. Hopefully they'll be strong enough to create a new dynamic of ownership and responsibility while giving us the assurance that these factories are indeed "good" factories when we don't have the manpower or the time to visit them firsthand.

Building the Fundamentals

When I was interviewing for my new position, I was informed that my role would be to build a program from scratch. So, I expected to think through some of the company's risks, review processes and work toward making recommendations.

Little did I realize that I'd have to take a few steps back!

In my first week-and-a-half of work, I've been working with our Sourcing and Supply Chain teams to build very basic processes such as onboarding a new supplier and determining a scorecard of metrics to rate supplier performance. It's been a very steep learning curve and I've had to not only learn the company, but I've had to familiarize myself with the industry and the intricacies of a global supply chain.

Even though I'm completely out of my element and trying desperately to understand our quality standards, purchase order processes, product capabilities testing, costing and production processes, I've realized this gives me a very unique opportunity. It's been frustrating at times, but I actually have a seat at the table during these discussions and I'm responsible for ensuring that social and environmental factors are included in processes and measurements.

From my past experience and from speaking with other CSR practitioners, I think it's typical for CSR to be "layered" onto existing processes and systems. We focus on finding ways to integrate CSR into business processes and finding opportunities to influence process change. Here, we're building processes and systems together, incorporating CSR considerations from the outset!

While it's forcing me way out of my comfort zone and while we're moving at lightning speed (much faster than I've had to work in a long time), I'm very excited at the possible outcomes and having a voice at the very beginning.

Industry Boomerang and Career Paths: An Open Letter of Apology

Dear internet friends,

I realize it's been a long time since I last posted, and for this I apologize. You see, since I last posted, I became pretty busy, wrapping up my job, coordinating a cross-country move (which is still in slow, slow progress) and preparing to begin a new job tomorrow.

After only 19 months in the healthcare industry, I decided to return to my roots, accepting a position to begin a vendor compliance and CSR program at a specialty apparel retailer. People have asked me if my time in healthcare was so bad that I lasted such a short period of time, and I insist that isn't the case. Instead, I was lucky enough to be offered an opportunity that will allow me to build a program from the ground-up.

As nearly everyone knows, the CSR "profession" is still a relatively new one. Unlike Corporate Finance, where a career path is relatively straightforward, positions in CSR differ widely from one industry to another - and even from one company to another within an industry. And thus, there is no one "career path" if you want to ultimately lead CSR at a company.

It was early on in my most recent job that my supervisor told me that it would be unlikely for me to find myself in a VP position in CSR at that company. Since she loved her job and continued to be challenged by her own VP position, she had no plans to vacate it. (And why would she?) So, she offered kindly, she would help me find a leadership position with another company, once I was ready for that next step.

Well, I think that next position is now in front of me, even if it arrived more quickly than either my former boss or I expected. The job I begin tomorrow puts me in charge of developing supply chain social and environmental standards and stakeholder engagement, with the hopes of building out a fuller CSR capability. It's in the industry where I got my first taste of a CSR role in a corporation and it's with a brand whose heritage I'm excited to become a part of.

My focus will be shifting considerably: from environmental sustainability to human rights in multinational supply chains. It's a shift I'm excited for, but I do hope to retain the environmental responsibility as well.

As I think about my career, it's important for me to "round out" my CSR portfolio, gaining experience in different focus areas so I may become a more effective CSR leader in the future. It's also important for me to find increasing levels of responsibility and challenge, to grow my skills and stretch myself. So, while I'm sad to leave my last company and the wonderful people I've had the chance to work alongside, I am very excited for this next chapter in my CSR career, where I will hopefully continue to learn and truly make a difference.

So, I apologize for the radio-silence, but I got very busy and I hope to post more frequently moving forward!

Sincerely,
Marcus

Communicating Corporate Disaster Response

After last week's tragic earthquake in Haiti, many companies, including my own, have been busy determining how best to respond. I'm not directly responsible for organizing our response, but it was sort of an "all hands on deck" attitude for the days immediately following the disaster.

Even though horrible natural disasters happen more frequently than anyone would like, few companies seem to have clear procedures in place for how to respond. I've spoken with colleagues from other companies to benchmark their levels of response and I continue to hear stories of uncertain commitments and tentative communications.

But it does seem like companies take into account a few basic facts before mobilizing resources. At my current and former companies, we would consider a few questions after any major natural disaster:

• Do we have major operations in the affected region?
• Were any of our employees impacted directly?
• Were any of our key customers and/or suppliers impacted directly?
• What was the scale of the devastation?
• Do our employees seem eager to help?
• Which agencies seem best positioned to help quickly and effectively?
  
• Can we offer any unique aid that no other company can?
• What are other companies doing?

I don't mean to suggest that companies shouldn't ask these questions or that they're inadequate since every situation clearly is unique. What's interesting to me is the last question in the above list.

Over the days following the initial earthquake, we continued to commit more money, more resources, more products to relief. Our employees donated their own money, time and resources, and our Foundation sought to match employee donations.

Interestingly, media reports began discussing how much money American corporations were committing to disaster relief. Companies started issuing press releases and tweeting. The U.S. Chamber of Commerce Business Civic Leadership Center started to compile a list of companies and the value of their reported donations.

For the latter part of last week, I was involved in a very heated e-mail exchange regarding whether or not we should communicate our commitment and which methods might be the most appropriate. Several people felt very strongly that our commitment, while generous, paled in comparison to some companies of our size. Others felt that we should communicate our commitment so that our employees wouldn't miss seeing our company's name alongside other major corporations on lists. Some felt that we should communicate through very select channels so as to avoid appearing "boastful."

During this lengthy exchange, I wondered whether we were missing the point. After all, wasn't it most important that we were doing something, no matter how big or how small? Do people really sit around and compare the monetary value of companies' donations? Am I just being naive?

CSR Reporting: Who's Reading Them and Is That the Point?

Recently, I flew on United Airlines and noticed that, along with Hemispheres magazine, a SkyMall catalog and the airplane safety card, each seat-back pocket contained a copy of the company’s 2008-2009 Corporate Responsibility Report.

Since I’ve been writing these types of reports for the past several years, I thumbed through it, looking for anything interesting or innovative. Is the data presented in a compelling fashion? Do any headlines stick out as particularly remarkable? Are there any topics that I didn’t expect to see covered?

Even though I’ve been in the reporting business for a while, I’ll admit that I haven’t read that many CSR reports cover-to-cover. But I did read more of United’s report than many others that cross my desk. Why? Because I was trapped on a plane!

To me, this seemed like a pretty ingenious plan on United’s part. When you have hundreds of customers, confined to a space, why not give them the chance to learn about your CSR efforts. Even if they don’t actually read the document, they’ll surely be struck by the fact that there’s a CSR report at their fingertips. And they may even learn something new about the company!

The success of this plan was reinforced a few weeks later when a friend of mine visited from LA and let me know that he’d seen the CSR Report on his flight. He’s not at all interested in CSR, but he knows that I am, and he asked my opinion on some of United’s practices. Here is a customer who wasn’t necessarily searching for this type of information who suddenly knew a lot more about United’s CSR initiatives than he did about other companies' efforts. What a great way to engage your customers.

Apple’s objection to issuing a CSR report because few people read them strikes me as hollow. First, come up with a new way of reaching your intended audience. Second, and more importantly, reporting isn’t simply about one-way communication. The most notable outcome of public reporting, in my opinion, is that companies start to put a stake in the ground and spark internal conversations (and initiatives) around CSR issues. As a CSR practitioner, I’m constantly trying to find ways to engage internal business partners on CSR issues. Publishing a CSR report is one of the most effective ways to do this and to start to shepherd change in a company.

But I think there needs to be more thought around CSR communications, in general. Are CSR reports the best way to communicate? Should you try to engage customers on these issues through a CSR report or are there more appropriate vehicles?

Sometimes, I think companies get so caught up in the idea of creating a GRI-based report, that they miss the bigger picture. After all, isn’t the goal to engage our stakeholders so that we can take a thoughtful approach to our CSR journeys toward meaningful outcomes?

Some Advice for Vendors

As with any new field, CSR is a growing area in need of support. To fulfill that need, hundreds and hundreds of vendors pop up every day, trying to create solutions that will make CSR practitioners' lives easier and help companies realize their CSR objectives.

Hardly a day goes by when I'm not contacted by someone offering consulting services, software, research or something else. The service providers range from established to start-up and it becomes difficult staying on top of all the different vendors and products out there.

I've had my fair share of interactions with different vendors and it shocks me that some act so unprofessionally. After all, representatives are ambassadors of their company's brands and they should realize that their actions reflect on the product or service they're trying to sell. Below are a few experiences I've had that clearly fall into the "don't" category.

Don't come on too strong. One vendor approached my company with a new service that purported to catapult our CSR communications into the stratosphere. An account manager contacted me, my boss and three people in our Corporate Communications team. Once we realized he'd contacted all of us, I scheduled a meeting between him and some other relevant employees. On the call, he was aggressive and pushy, completely turning us off. We told him that we were not interested in his services and he continued to call anyone he could find at the company, aggressively marketing his product even if they were not connected to CSR. All calls and messages came back to me and I stopped responding.

Don't stand me up. I recently scheduled a conversation with a vendor simply because my boss asked me to. I had no idea what the product was or how it related to CSR and neither did my boss, but she asked me to find out what they had to offer. So, I scheduled a conversation and web demo with a representative and waited at the appointed time, but no one called me. Four hours later, I received a rambling voice message informing me that his calendar notified him of a meeting but that he had no idea why he was scheduled to talk to me.

Don't insult a potential customer. A colleague and I were on a conference call/web demo of a software solution that we were really interested in learning about. Toward the end of the call, when we started to discuss cost and budget, I mentioned a figure that seemed reasonable to me, but was negotiable. One of the executives said that we shouldn't even bother continuing the conversation because they wouldn't do business with us at such a low price. A few months later, when a sales representative called to pitch me a new product, I didn't return his call.

Don't assume I have a ton of money. Right or wrong, CSR is often viewed as a cost center and we don't have huge budgets to work with. The money we do have is often tightly controlled and every penny counts. Just because our marketing department may spend millions of dollars, don't think our department has millions of dollars to spend. On anything.

Don't bash your competitors. I once was on the phone, learning about a service and I asked the sales representative to compare his service to a competitor's that seemed similar in my mind. He then flat-out insulted the competitor's product but offered no points of distinction. It seemed like a defensive, illogical and ungraceful response - not exactly the type of people I like to do business with.

Don't create an unnecessarily awkward situation. This one's debatable, but once a vendor invited me and a few of my co-workers to their company holiday party. The next morning, when I chatted with our account representative, I learned that the party featured a table where a naked couple slowly ate a meal. This, apparently, was performance art. I also started to hear stories about how employees were getting plastered, behaving out of hand and hooking up with each other. I was sort of sad to miss the show, but overall I was grateful I didn't see any of the people I worked with in embarrassing situations.

Data Dependency

Most CSR practitioners, I believe, continue on a quest for data. We all want data to support our theses that good corporate citizenship adds value to the company. Value can come in the form of cost savings, enhanced reputation, employee engagement or any number of other shapes and sizes.

The tricky part about gathering data to support CSR is that there are very few defined ways to measure impact and value. And as such, there are very few methods or systems to gather meaningful CSR data within companies. Much of my job is spent trying to take the company's existing data and either performing some calculations to arrive at CSR impact metrics or finding proxies for the value I'm trying to describe.

Since returning to work from the holiday break, I've been working a lot with data for two separate projects. One has to do with calculating environmental impacts of a particular process and the other relates to measuring consumption of a particular resource across the enterprise.

For the first project, I've been trying to get at some raw data from other Business Units. In theory, this should be rather simple. I pick up the phone, call someone in another department, explain the project and describe my need. They, in turn, either take some time to "run some numbers" and send me back the relevant information or they refer me to someone else. Usually, it's the latter, so it typically takes a few days (yes, days!) to track down the right person. More often than not, the data that returns isn't quite what I'm looking for, so we work together until we arrive at something meaningful.

Well, this process has been playing out for nearly two months with a particular business partner and his unresponsiveness has resulted in me not being able to deliver on some promised metrics. I hated to throw him under the bus, but I had to bring in a VP to finally get him to send me the data he'd promised back in November. Approximately an hour later, I delivered the metrics that were expected of me.

In the second case, I recently received a spreadsheet with spend data from every cost center in the company (thousands) and I've been diligently pouring through it, figuring out which line item is relevant and which is outside the scope of this project. Essentially, I'm taking the spend data, translating it into units purchased and figuring out the resources necessary to create those units, resulting in the environmental impact of our consumption. The problem here is that I have to make sense of a spreadsheet that isn't necessarily meant for this purpose and is riddled with codes, acronyms and sequences of numbers I don't understand. It's time-consuming work and rather tedious, but hopefully will tell a good CSR story in due time.

With both examples, you see how CSR practitioners must rely on others to supply information before we can produce results. For my business partners, they can simply run a report through an existing information management system, but I have to spend time doing manual calculations because no system exists (or we can't afford such a system) to extract data in the format we need.