Posts in category: Corporate Responsibility

The Corporate Accountability and Public Participation Africa (CAPPA) has called on governments across the country to provide support for farmers to boost agricultural production. Speaking at an event to herald the World No Tobacco Day, the Executive Director of CAPPA, Mr Akinbode Oluwafemi said this has become necessary to help their transition from tobacco to crop farming.

World No Tobacco Day is marked every May 31, as set aside by the World Health Organisation to call attention to the ills of tobacco cultivation and consumption. The theme of this year’s celebration is ‘We need Food, Not Tobacco”

Speaking during the programme, Mr Oluwafemi called on governments to include financial aid, affordable agricultural loans and insurance products as parts of their programmes  to help the farmers and protect them from unforeseen losses.

He added that during a recent trip to the Oke-Ogun area of Oyo State, the main tobacco growing belt in the southwest region, the farmers shared their experiences expressed their frustration in getting government’s assistance to support their transition efforts.

He observed that the stories told by the former tobacco farmers highlight the regrettable truth of how the tobacco industry often treats these crucial contributors to their global supply chain as disposables. CAPPA, therefore, called on the government to Investigate the disengagement contracts the British American Tobacco (BAT) Nigeria signed with local tobacco farmers in view of a breach of the terms which some of the farmers alleged.

CAPPA also called for an audit of the total acreage allocated to tobacco farming in Oke Ogun, and the entire country to help the government determine the level of damage done to the environment. It also called for a verifiable afforestation programme in the entire Oke Ogun axis to make up for decades of depleted ecosystem.

In its eight-point suggestions, the non-governmental organization called on governments at all levels to set up and support the establishment of Farmers’ cooperatives to bolster their collective bargaining power when negotiating prices for crops and insulate them against market fluctuations.

It called for support of crop diversification programmes that can provide farmers with alternatives to tobacco farming, such as provision of resources to farmers to grow crops that are not only profitable but also sustainable and beneficial for the health of the land and people.

According to it, investment in local infrastructure such as irrigation systems, storage facilities, and transportation networks to aid the farming community would go a long way to helping farmers. It restated its stand on the harmful realities of tobacco cultivation which involves the use of pesticides that are harmful to tobacco growers, to the cutting and burning of trees for tobacco curing which leads to deforestation (about 3.5 million hectares of land are destroyed each year).

Also, CAPPA’s director of programmes, Mr. Philip Jakpor, emphasized that World No Tobacco Day “ is commemorated to raise awareness about the harms caused by tobacco products to people, public health, communities, the environment, and as recent evidence has shown, to the climate.”

He added that “The commemoration draws attention to the widespread prevalence of tobacco use and to its negative health effects, which currently lead to more than eight million deaths each year worldwide, including 1.2 million as the result of non-smokers being exposed to second-hand smoke.”

He said the WHO is raising awareness about the ways the tobacco industry interferes with attempts to substitute tobacco growing with sustainable crops, thereby contributing to the existing global food crisis.

He observed that “For us at CAPPA, the theme (We need Food, Not Tobacco) aligns with our conviction, which is supported by science, that tobacco cultivation processes from clearing of large tracts of land, cutting of trees for tobacco curing, and cigarette manufacturing, also contribute to the climate crisis and ultimately, threaten food security.”

He, therefore called on government to accelerate the implementation of Articles 17 and 18 of the WHO Framework Convention on Tobacco Control (WHO-FCTC) and its guidelines that outline how farmers can be supported from tobacco growing to sustainable alternative crops.

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Meta, the parent company of Facebook and Instagram, was fined a record 1.2 billion euros ($1.3 billion) and ordered to stop transferring data collected from Facebook users in Europe to the United States. This is one of the biggest rulings against a social media company for violating European Union data protection rules. 

The United States surgeon general, Dr. Vivek H. Murthy, issued a public advisory warning of the risks of social media use to young people. The surgeon general called on policymakers, tech companies, researchers and parents to “urgently take action” to safeguard against the potential risks.

Find the latest research and expert commentary on privacy issues and controversial business practices in the Business Ethics channel.

Expert Profiles

Expertise: Corporate Responsibility

Kellie A. McElhaney, PhD
University of California, Berkeley Haas School of Business
Distinguished Teaching Fellow | Founding Director of the Center for Equity, Gender and Leadership

Sarah A. Soule, PhD
Stanford Graduate School of Business
The Morgridge Professor of Organizational Behavior Senior Associate Dean for Academic Affairs

Expertise: Banking, Financial Markets

Andrew Ching, PhD
Johns Hopkins University Carey Business School
Professor

Mauro Guillen, PhD
Wharton School of the University of Pennsylvania
Zandman Endowed Professorship in International Management

Clifford Rossi, PhD
University of Maryland, Robert H. Smith School of Business
Professor of the Practice & Executive-in-Residence

Darrell Duffie, PhD
Stanford Graduate School of Business
The Adams Distinguished Professor of Management and Professor of Finance

Jeffrey Hooke, MBA
Johns Hopkins University Carey Business School
Senior Lecturer

Expertise: Cybersecurity/Digital Privacy

Bryan Cunningham
University of California, Irvine
Executive Director, UCI Cybersecurity Policy & Research Institute

Matthew Hashim, PhD
Eller College of Management at the University of Arizona
Associate Professor of Management Information Systems

Itay Fainmesser, PhD
Johns Hopkins University Carey Business School
Associate Professor

Gavin Phillipson, BA(Hons), CPE, LLM
University of Bristol
Professor of Public Law and Human Rights

Scott Shackelford, J.D., Ph.D.
Indiana University
Executive Director, Center for Applied Cybersecurity Research; Executive Director, Ostrom Workshop; Professor, Business Law & Ethics

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Google’s new antitrust case ‘unlikely to be resolved quickly’

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Research

Why do so many businesses fail? A new study suggests it has to do with when they’re born

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The importance of social media in corporate social responsibility

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Are Socially Conscientious CEO’s Better Leaders?

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Wealthy white homeowners more likely to see financial benefits from land conservation, study shows

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Update May 25, 2023: This post has been updated with a comment from Chevron.

The already questionable $2 billion a year voluntary emissions offset market is facing even more scrutiny. An investigation by transnational corporate watchdog Corporate Accountability first reported in The Guardian found that carbon offsets from fossil fuel giant Chevron are mostly worthless—could also cause harm. The investigation found that the company relies on “junk” carbon offsets and “unviable” technologies. These actions do little to offset the company’s greenhouse gas emissions. 

The new research from Corporate Accountability found that between 2020 and 2022, 93 percent of the offsets that Chevron bought and counted towards their climate targets from voluntary carbon markets were actually too environmentally problematic to be considered as anything other than worthless or junk.

[Related: Many popular carbon offsets don’t actually counteract emissions, study says.]

Carbon offsets are tradable “rights” or certificates that allow the buyer to compensate for 1 ton of carbon dioxide or the equivalent in greenhouse gasses. These offsets are usually in the form of an investment in emissions-reducing environmental projects in other parts of the world. 

An investigation by The Guardian and Germany’s Die Zeit, and the nonprofit journalism outfit, SourceMaterial earlier this year found that the world’s leading provider of these offsets, Verra, may be making the climate worse. Verra is often used by major corporations like Shell and Disney, but over 90 percent of Verra’s most popular rainforest offset credits were discovered to be  “phantom credits” that do not result in “genuine carbon reductions.”

Carbon offsets are considered worthless or having low environmental integrity if the project is linked to a plantation, forest, or green energy project. This includes hydroelectric dams that don’t lead to any additional reductions in greenhouse gasses, or exaggerates the benefits and minimizes risks of emitting emissions, among some other factors.

Chevron often purchased offsets that focused on large dams, plantations, or forests, according to the report. It found that many of these “worthless” offsets are also linked to some alleged social and environmental harms. These harms are primarily in communities in the global south, which happen to face the most harm by the climate crisis that Big Oil helped create. 

“Chevron’s junk climate action agenda is destructive and reckless, especially in light of climate science underscoring the only viable way forward is an equitable and urgent fossil fuel phase-out,” Rachel Rose Jackson from Corporate Accountability told The Guardian.

Chevron is the second-largest fossil fuel company in the United States and its vast operations stretch north to Canada and the United Kingdom and south towards Brazil, Nigeria, and Australia. It reported over $35 billion in profits in 2022 and its projected emissions between 2022 and 2025 are equal to those from 364 coal-fired power plants per year. This is more than the total emissions of 10 European countries combined for a similar three-year period, according to the report.

[Related: BP made $28 billion last year, and now it’s backtracking on its climate goals.]

Chevron “aspires” to achieve net zero upstream emissions by 2050, largely relying on carbon offset schemes and carbon capture and storage to do this. Carbon offsets rely on environmental projects to cancel out a company’s greenhouse gas emissions.

The new report further argues that the widespread use of these worthless offsets undermines the company’s net zero aspiration. Their net-zero aspirations only apply to less than 10 percent of the company’s carbon footprint–the upstream emissions that are produced from the production and transport of gas and oil. It excludes the downstream or end use emissions that are due to burning fossil fuels.

“Any climate plan that is premised on offsets, CCS, and excludes scope 3 [downstream] emissions is bound to fail,” Steven Feit, fossil economy legal and research manager at the Center for International Environmental Law, told The Guardian. “It’s clear from this report and other research that net zero as a framework opens the door for claims of climate action while continuing with business as usual, and not moving towards a low-carbon Paris [agreement]-aligned 1.5-degree [2.7 degree] future.”

Bill Turenne, an external affairs coordinator from Chevron, added via email that Chevron believes the report is “biased against our industry and paints an incomplete picture of Chevron’s efforts to advance a lower carbon future.” The offsets reviewed in the Corporate Accountability report are “compliance-grade offsets accepted by governments in the regions where we operate,” Turenne said.

Roland Iwuchukwu

There are allegations pointing that some global tea buyers have been linked to cases relating to human rights violations.

A fresh report reveals that the global tea industry has had its hands full with the economic implications of the Ukraine war.

But hidden away is another problem it needs to handle: rights abuse in plantations.

Around 13 million tea estate workers suffer “endemic human rights abuses” in Kenya, Uganda, India, Sri Lanka, Bangladesh, and 43 other countries, according to the UK-based Business & Human Rights Resource Centre (BHRRC).
The abuse allegations at the supplier level include violations of freedom of association, health and safety infringements, wage payments, and living standards.

“As estate managers look to cut costs in an increasingly unprofitable industry, there is a growing trend towards the use of temporary contracts, third-party labour providers and other precarious employment arrangements,” the BHRRC report published earlier this month said.

“These heighten workers’ vulnerability to abuses, including sexual exploitation and health and safety violations, and make it more difficult for workers to unionize to collectively defend their rights,” it said.
The report detailed responses from 16 tea majors and retailers—Starbucks, Unilever, Marks & Spencer, Tetley, Morrisons, Twinings, Ahmad Tea, Bettys & Taylors, Ekaterra, Goodricke, James Finlay, Jenier, Plus, Ringtons, Tesco, and Typhoo—buying from estates where 47 of the 70 alleged human rights abuse occurred. Out of 16, only UK-based Plus did not respond to the allegations, the report said.

While the cost of tea production has risen over the years, prices have largely remained unchanged.

Climate change and the Ukraine war are only the most recent problems that have added to the burden, the BHRRC report has stated.
And it is the tea estate workers that pay the highest price. Apart from already low wages, they face other persistent problems like “unpaid overtime, recurrent indebtedness and degrading and unsafe living and working conditions including endemic sexual harassment and abuse,” the BHRRC report said.

All this is despite most companies having policy commitments in place to protect labour rights. This makes the full disclosure of supply chains by companies pertinent, so as to ensure corporate accountability.

Some of the world’s largest tea buyers have disclosed where they source their tea from, but many have not published details of their supply chains, the BHRRC report said. “…the only thing stopping companies from being transparent is their own commitment and willingness,” it said.

For instance, in Bangladesh’s eight tea estates, from where Netherlands-based Ekaterra purchased tea in 2022, nearly 150,000 tea workers put forth their demand for a wage increase.

Similarly, in Sri Lanka, several plantation companies reportedly refused to pay the increased wages to tea estate workers, citing it would cause them to incur significant financial losses. Starbucks, Unilever, Marks & Spencers, Tetley were some of the tea conglomerates that buy tea from Sri Lanka’s plantations.

India’s story is not any different.

The BHRRC report found that responses by five companies—Morrisons, ekaterra, Ringtons, Marks & Spencer, Tetley had “almost identical wording,” while deflecting the responsibility for uplifting wages to other entities such as the local government and their suppliers.

The investigation found that companies don’t engage directly with tea estate workers to assess their working conditions and demands.

“There appears to be little engagement with suppliers or engagement with other actors, such as state governments, trade unions and civil society organisations, to mitigate the effects of estate closure or sale or changes in business structure for workers and residents,” the report said.

“Any climate plan that is premised on offsets, CCS, and excludes scope 3 [downstream] emissions is bound to fail,” said Steven Feit, fossil economy legal and research manager at the Center for International Environmental Law.

“It’s clear from this report and other research that net zero as a framework opens the door for claims of climate action while continuing with business as usual, and not moving towards a low-carbon Paris [agreement]-aligned 1.5-degree future.”

Chevron’s projected emissions between 2022 and 2025 are equivalent to the emissions from 364 coal-fired power plants annually—and dwarf the total emissions of 10 European countries combined for a similar three-year period: Austria, Norway, Sweden, Switzerland, Denmark, Lithuania, Slovenia, Estonia, Latvia and Iceland.

The Guardian sent Chevron detailed questions about the report’s findings, but the company declined to comment.

Even if Chevron met its “net zero” goals, its plan ignores ~90% of the emissions it ultimately creates

It is the latest research to call out carbon offsets and carbon capture as false climate solutions, given that both enable—even encourage—polluters to keep emitting greenhouse gases.

Earlier this year, a Guardian investigation revealed that the forest carbon offsets approved by Verra, the world’s leading certifier which is used by Disney, Gucci, Shell ,and Chevron, are mostly junk and could make global heating worse.

Experts say that the findings shine a light on the broader strategy to undermine and delay meaningful climate action. “This is how we lose a planet: through corporate dishonesty and obstruction,” said Peter Kalmus, a Nasa climate scientist speaking on his own behalf.

“This deeply documented history of greenwashing and malfeasance should make every human on Earth who isn’t paid by the fossil fuel industry furious,” added Kalmus.

The International Energy Agency warned back in 2021 that there could be no further expansion of oil, gas and coal production if the world is to stay within the safe limits of global heating at 1.5C and have any chance of avoiding catastrophic climate breakdown.

Yet fossil fuel companies such as Chevron have continued to expand apace, and a recent study found that the world is on track for an increase of 2.7C, which will lead to “phenomenal” human suffering.

In recent years, vast amounts of time and resources have been invested into schemes and technologies that trade, cap and capture—rather than cut—greenhouse gas emissions.

Today’s report into Chevron’s climate action found:

1. Chevron relies almost totally on junk carbon credits to offset its upstream greenhouse gas emissions.

A carbon offset credit is a tradable “right” or certificate that allows the purchaser to compensate for 1 ton of carbon dioxide or the equivalent in greenhouse gases by investing in emissions-reducing environmental projects elsewhere.

The voluntary carbon offsets market is worth $2 billion—and growing rapidly—despite little evidence of positive climate impact.

Between 2020 and 2022, Chevron “retired” or cashed in 5.8m carbon credits—mostly through four major voluntary carbon market project registries, according to the AlliedOffsets database.

Corporate Accountability found that almost all of the carbon offsets Chevron bought and counted towards its climate targets had “low environmental integrity” and should therefore be presumed to be junk.

Projects categorized as junk offsets include those certified by a carbon standard with demonstrated low environmental integrity.

Almost one-third of Chevron’s voluntary carbon market credits were cashed in through Verra’s “verified carbon standard” registry—the world’s leading carbon standard. The Guardian investigation found that over 90 percent of Verra’s rainforest offset credits—among the most commonly used by companies—are likely to be illusory. Verra has rejected the findings as “hugely overstated.”

Large-scale plantations and large hydroelectric dams were among Chevron’s other offset projects also categorized as having low environmental integrity. This was because it appears likely that the projects don’t lead to additional emissions reductions that wouldn’t have happened otherwise, risk actually releasing (rather than absorbing) emissions, over-exaggerate project impacts or involve underpriced credits.

This comes as no surprise for communities harmed by Chevron’s oil and gas operations. “Chevron’s shareholders keep signing off on the continued toxification and destruction of communities in Richmond, Africa, Ecuador, Australia—all around the world,” said Katt Ramos, 43, managing director of Richmond Our Power Coalition. “It’s laughable that we would look to a company causing so much harm for the solutions.”

2. Chevron increasingly relies on large hydropower dams for offsets.

About half of the carbon offsets that Chevron bought between 2020 and 2022 are associated with hydroelectric dams.

Studies have found that large dams do not lead to new or additional emissions reductions, and in some cases have been associated with land disputes, increased poverty and environmental damage—including substantial greenhouse gas emissions. A 2019 study found that “some hydropower reservoirs are actually carbon sinks … while others have carbon footprints equal to or greater than fossil fuels.”

Chevron’s offsets include two large hydropower dams in Colombia, El Quimbo and Sogamoso, which have both been mired in allegations of major flooding, forced displacement and serious acts of violence, according to Andrés Gómez Orozco from Censat, a Colombian environmental group.

Chevron continues to expand its fossil fuel operations in Colombia—one of the most deadly countries in the world for environmental activists and one of the most vulnerable to the impacts of the climate crisis—with two major offshore exploration projects in the Caribbean.

It is the season of annual shareholder meetings for giant corporations when CEOs go through the motions of elections for their Board of Directors and approval of other resolutions. People who own stock in General Motors (GM) receive the “GM Meeting Information” in an envelope emblazoned with this disingenuous message: “Your Voice/Your Vote/Be Heard. Every Vote Matters.”

When you look inside, you learn that this virtual meeting is on June 20, 2023, “live via Webcast.” No more in-person shareholder meetings, where at least for a couple of hours a year, the GM CEO, officers, and the Board of Directors would have to hear out their powerless owner-shareholders’ recommendations or complaints. The media reports of these gatherings would sometimes highlight shareholder demands.

Not surprisingly, GM wants its shareholders to vote on management’s proposed “full agenda,” for this globally omnipresent giant auto company – with its factories, offices, and other installations radiating impact in many directions that affect economics, politics, the environment, and lives of workers, taxpayers, and consumers.

The agenda reveals the anemic state of individual and institutional shareholders, long disempowered by the corporate toady – Securities and Exchange Commission (SEC). GM management only presents seven proposals for a vote. The first is to re-elect its 13-member Board of Directors, starting with Chair and CEO Mary T. Barra. The second is to ratify the election of Ernst & Young LLP as the company’s accounting firm. The third is to vote on the “advisory approval of Named Executive Officer Compensation,” and the fourth is to approve the company’s “long-term incentive plan.”

The GM Board of Directors urged an affirmative vote for these four proposals but they declined to do so for proposals 5, 6, and 7 that came from the owners-shareholders, which means GM, the company, is opposed.

Proposal 5 requested a report on GM’s operations in China; Proposal 6 asked for Shareholders’ Written Consent on some matters; Proposal 7 dealt with “sustainable materials procurement targets.”

Shockingly, proposals 5, 6, and 7 were too much for the imperial hired bosses of GM, who gave not a single nod to their shareholders’ requests. And not a single worry that next year would bring heightened indignation by large institutional shareholders (e.g., Fidelity, Vanguard, etc.) or individual owners. Proposals before the SEC to give shareholders more voice on more matters (e.g., campaign contributions) remain bottled up for years by corporate lawyers and the mostly indentured SEC Commissioners.

Imagine, after explicitly promising not to make any campaign donations to members of Congress who voted to overturn the 2020 election results, GM broke its promise in 2022 and sent hefty checks to 12 of the GOP seditionists and the National Republican Campaign Committee. MoveOn released an excoriating TV ad on GM’s broken promise. But no proposal cleared the barriers to demand an apology and other corrective actions for GM’s betrayal of the public trust.

It’s not just GM, of course. When Apple held its virtual meeting on March 10, 2023, the Board of Directors recommended a “Yes” vote to 1) re-elect members of the Board, including Al Gore, 2) “Yes” to ratifying Ernst & Young as its accountant, and 3) “Yes” to an “advisory vote to approve executive compensation.” However, Apple’s management responded with silence, meaning thumbs down, to shareholder proposals on “civil rights,” one on a China audit, another on communication with shareholder proponents, and lastly, one on “racial and gender pay gaps.”

“The efforts of shareholder activities paint a dismal picture of historically high corporate supremacy over our political economy and its culture.”

The giant New England utility company Eversource Energy held its May 3, 2023 shareholder meeting in person, but at the corporate law firm of Ropes & Gray LLP. This is not exactly a space for hundreds of the company’s owners to turn out. No matter, all the proposals on the agenda once again were the company’s proposals dealing mostly with executive compensation. There were zero agenda items dealing with the company’s “blackouts,” disinvestment in skilled emergency staff, buying up public drinking water systems, climate issues, or its customers’ formidable difficulties registering complaints about a rate formula that no longer charges consumers for what they use, but rather bills customers using an arcane, more expensive formula.

So, the long slide for shareholder-driven corporate accountability continues. Yet the long upsurge in overwhelming corporate power also continues unabated – controlling federal and state regulators, blocking or dragging out court challenges for purposes of tactical attrition, pouring money into the campaign coffers of elected lawmakers and judges, and “handling” the large mutual and pension funds. (These large funds are similarly structured top-down with heavy payments to the bosses.)

Some nonprofits and religious orders still make a valiant try each spring with a few companies focusing on climate violence policies or the insatiable demands by manufacturers of large weapons of mass destruction. But the immunized, pampered, super-rich CEOs lose little sleep over such challenges.

Some large institutional shareholders like Blackrock, through its CEO Larry Fink, orate that companies should address the conditions of communities’ suppliers, workers, consumers and other affected “stakeholder” groups. But saying is not doing. And with about $8 trillion in invested assets, Blackrock could do a lot.

Shareholder and advocacy groups’ nudging sometimes brings forth voluntary moves, such as Starbucks eliminating plastic straws globally in 2020. Overall, the efforts of shareholder activities paint a dismal picture of historically high corporate supremacy over our political economy and its culture. All the while the algorithms grip and the chatbots loom.

Since corporations are all chartered into existence by state governments, it is time to dust off a more than hundred-year-old federal chartering proposal espoused by Presidents William Howard Taft, Theodore Roosevelt and Woodrow Wilson. Federal chartering might delineate better the terms of corporations’ existence and operations. That was the way they and others during the Progressive Era, wanted to rewrite the contract between giant companies and the government.

In 2018, Senator Elizabeth Warren (D-MA) proposed federal chartering by introducing the Accountable Capitalism Act, which is needed now more than ever in this globalized economy. She has yet to re-introduce the bill, seek co-signers, and hold public hearings on this proposal which have been long-sought by civic advocates.

Existing state-based corporate chartering laws (mostly shaped by the race-to-the-bottom states of Delaware and Nevada) are ludicrously obsolete, hailing from the days of the quill pen.

For several years, we’ve been inviting Senators Elizabeth Warren and Bernie Sanders on our radio show/podcast (https://www.ralphnaderradiohour.com/) to discuss the big-picture questions of giant corporatism. They have yet to accept.

Do you wonder why the progressive forces have so little influence over their forlorn allies in the Congress? Wonder no more. See our new report The Incommunicados (https://incommunicadoswatch.org/) for some compelling evidence.