Corporate meltdown: Some insights

With the recent global financial meltdown, conversations amongst corporate giants have arisen in relation to corporate citizenship and financial sustainability. Featured below are some evaluative reflections. 

Dr Bradley Googins, Executive Director of the Boston College Center for Corporate Citizenship:

"It is clear the failure of an unregulated financial system that almost brought the house down will no doubt be followed by aggressive legislation and regulation as an antidote to calm the fears. Already there have been discussions by congressional leaders and others about using this new window to mandate new measures to address climate change, implement safeguards for food, toys and prescription drugs from China, and expand health care insurance mandates.

This sudden jolt to our business and to our society and the destructive trail it is leaving can be seen as a damning indictment of business holding onto an excessive free market model and not listening to the growing voices of other stakeholders that have been getting stronger over the past few years. The rise of the green consumer, social investing and the incipient wave of new expectations from millennial employees have been largely ignored or not taken seriously. Even Bill Gates’ call for a creative capitalism to address the cracks that are beginning to appear in the foundation was not widely embraced... Gates’ call at Davos for a new form of capitalism in effect recognizes this bind, and serves as a clarion call for a new approach where the issues of all stakeholders can be factored into a more inclusive and transparent process. This new approach will also understand and address the flaws of the current model that not only overlooked but perhaps inadvertently exacerbated key issues of inequality, poverty and environmental degradation.

So where do we go from here?

At the very least it is time for a very active dialogue in the business community, and between the business community and those of government and civil society."

David Suzuki, Environmentalist, Suzuki Foundation

"Have you noticed that we describe the market and economy as if they were living entities? The market is showing signs of stress. The economy is healthy. The economy is on life support.

Sometimes, we act as if the economy is larger than life. In the past, people trembled in fear of dragons, demons, gods, and monsters, sacrificing anything – virgins, money, newborn babies – to appease them. We know now that those fears were superstitious imaginings, but we have replaced them with a new behemoth: the economy.

Even stranger, economists believe this behemoth can grow forever. Indeed, the measure of how well a government or corporation is doing is its record of economic growth. But our home – the biosphere, or zone of air, water, and land where all life exists – is finite and fixed. It can’t grow. And nothing within such a world can grow indefinitely. In focusing on constant growth, we fail to ask the important questions. What is an economy for? Am I happier with all this stuff? How much is enough?
        
A timely new book by York University environmental economist Peter Victor, Managing Without Growth: Slower by Design, Not Disaster, addresses the absurdity of an economic system based on endless growth. Dr. Victor also shows that the concept of growth as an indispensable feature of economics is a recent phenomenon.

The economy is not a force of nature, some kind of immutable, infallible entity. We created it, and when cracks appear, it makes no sense to simply shovel on more money to keep it going. Because it’s a human invention, an economy is something we should be able to fix – but if we can’t, we should toss it out and replace it with something better.
    
This current economic crisis provides an opportunity to re-examine our priorities. For decades, scientists and environmentalists have been alarmed at global environmental degradation. Today, the oceans are depleted of fish while "dead zones", immense islands of plastic, and acidification from dissolving carbon dioxide are having untold effects. We have altered the chemistry of the atmosphere with our emissions, causing the planet to heat up, and have cleared land of forests, along with hundreds of thousands of species. Using air, water, and soil as dumps for our industrial wastes, we have poisoned ourselves.
    
For the first time in four billion years of life on Earth, one species has become so powerful and plentiful that it is altering the physical, chemical, and biological features of the planet on a geological scale. And so we have to ask, "What is the collective impact of everyone in the world?" We’ve never had to do that before, and it’s difficult. Even when we do contemplate our global effects, we have no mechanism to respond as one species to the crises.
    
Driving much of this destructive activity is the economy itself. Years ago, during a heated debate about clear-cutting, a forest-company CEO yelled at me, "Listen, Suzuki: Are tree huggers like you willing to pay to protect those trees? Because if you’re not, they don’t have any value until someone cuts them down!" I was dumbstruck with the realization that in our economic system, he was correct.

You see, as long as that forest is intact, the plants photosynthesize and remove carbon dioxide from the air while putting oxygen back – not a bad service for animals like us that depend on clean air. But economists dismiss this as an "externality". What they mean is that photosynthesis is not relevant to the economic system they’ve created!

Those tree roots cling to the soil, so when it rains the soil doesn’t erode into the river and clog the salmon-spawning gravels, another externality to economists. The trees pump hundreds of thousands of litres of water out of the soil, transpiring it into the air and modulating weather and climate – an externality. The forest provides habitat to countless species of bacteria, fungi, insects, mammals, amphibians, and birds – externality. So all the things an intact ecosystem does to keep the planet vibrant and healthy for animals like us are simply ignored in our economy. No wonder futurist Hazel Henderson describes conventional economics as "a form of brain damage".

Nature’s services keep the planet habitable for animals like us and must become an integral component of a new economic structure. We must get off this suicidal focus on endless, mindless growth."

ACTU President Sharon Burrow

"The economic downturn provides an opportunity to invest in the creation of new green jobs while making significant inroads to reducing carbon emissions as part of an overall stimulus package," said ACTU President Sharon Burrow.

 

G20 Meeting in Sao Paulo, Brazil 9 Nov 08:

Finance ministers and central bank governors from the Group of 20 (G20) major industrial and emerging economies closed their annual meeting vowing to jointly tackle the global financial crisis.

The G20 has "a critical role to play in ensuring global financial and economic stability," said a joint statement released at the end of the two-day meeting.

Brazilian Finance Minister Guido Mantega, who chaired the meeting, said the participants agreed that "joint and coordinated action," "greater regulation of financial markets" and "total agreement" on policies are required to regain financial stability.

Other actions agreed upon at the meeting include fiscal incentives to enterprises, and more international cooperation to identify and rapidly respond to signs of national and international crisis.

The officials agreed that tax cuts and increased government spending are necessary to avoid a recession. They also pledged increased communication and coordination in the face of the crisis.

Sex and Power report reveals fewer women in positions of power and influence 

"A snail could crawl the entire length of the Great Wall of China in 212 years, just slightly longer than than the 200 years it will take for women to be equally represented in Parliament."

Sex and Power, the Equality and Human Rights Commission's annual report looking at women in top positions of power and influence across the public and private sectors, suggests a worrying trend of reversal or stalled progress - with only a few significant increases.

Now in its fifth year, the index this year indicates fewer women hold top posts in 12 of the 25 categories (almost half). In another 5 categories, the number of women remains unchanged since 2007's index. Women's representation has increased in just 8 areas.

There are fewer women MPs in Westminster, where they make up just 19.3 percent of all MPs. Women’s representation among FTSE 100 directors has improved slightly from 10.4 to 11.0 percent. 

The Commission has likened women's progress to a snail's pace. A snail could crawl:

• nine times round the M25 in the 55 years it will take women to achieve equality in the senior judiciary.
• from Land's End to John O'Groats and halfway back again in the 73 years it will take for equal numbers of women to become directors of FTSE 100 companies.
• the entire length of the Great Wall of China in 212 years, only slightly longer than the 200 years it will take for women to be equally represented in Parliament.

This year's report, which traditionally estimates the number of years at the present rate of progress it will take for women to achieve equality in key areas, indicates that compared to previous year's predictions it will now take 15 years longer (a total of 55 years) for women to achieve equal status at senior levels in the judiciary, and women directors in FTSE 100 companies could be waiting in the wings a further 8 years (a total of 73 years).

If women were to achieve equal representation among Britain's 31,000 top positions of power, the Commission estimates nearly 5,700 'missing' women would rise through the ranks.

This year's Sex and Power report is part of the Commission's ongoing 'Working Better' project. Launched in July of this year, the campaign is seeking to identify innovative ways of working which can help meet the challenges of the 21st century.

Nicola Brewer, the Chief Executive of the Equality and Human Rights Commission, said:

'Young women's aspiration is in danger of giving way to frustration. Many of them are now excelling at school and are achieving great things in higher education. And they are keen to balance a family with a rewarding career. But workplaces forged in an era of 'stay at home mums' and 'breadwinner dads' are putting too many barriers in the way - resulting in an avoidable loss of talent at the top.'

‘We always speak of a glass ceiling. These figures reveal that in some cases it appears to be made of reinforced concrete. We need radical change to support those who are doing great work and help those who want to work better and release talent.’

'The Commission’s report argues that today's findings are not just a 'women's issue' but are a powerful symptom of a wider failure. The report asks in what other ways are old-fashioned, inflexible ways of working preventing Britain from tapping into talent - whether that of women or other under-represented groups such as disabled people, ethnic minorities or those with caring responsibilities. Britain cannot afford to go on marginalising or rejecting talented people who fail to fit into traditional work patterns.'

You can download a copy of the report here: Sex and Power, who runs Britain 2008 (PDF 2.6Mb)

Global climate change presents a serious national security threat for the US.

A new study released by a blue-ribbon panel of retired admirals and generals from all branches of the armed services entitled, “National Security and the Threat of Climate Change,” explores ways projected climate change is a threat multiplier in already fragile regions, exacerbating conditions that lead to failed states — the breeding grounds for extremism and terrorism.

The CNA Corporation brought together eleven retired three-star and four-star admirals and generals to provide advice, expertise and perspective on the impact of climate change. CNAC writers and researchers compiled the report under the board's direction and review.

The report includes several formal findings:

• Projected climate change poses a serious threat to America's national security.
• Climate change acts as a threat multiplier for instability in some of the most volatile regions of the world.
• Projected climate change will add to tensions even in stable regions of the world.
• Climate change, national security and energy dependence are a related set of global challenges.

The report also made several specific recommendations:

• The national security consequences of climate change should be fully integrated into national security and national defense strategies.
• The U.S. should commit to a stronger national and international role to help stabilize climate changes at levels that will avoid significant disruption to global security and stability.
• The U.S. should commit to global partnerships that help less developed nations build the capacity and resiliency to better manage climate impacts.
• The Department of Defense should enhance its operational capability by accelerating the adoption of improved business processes and innovative technologies that result in improved U.S. combat power through energy efficiency.
• DoD should conduct an assessment of the impact on US military installations worldwide of rising sea levels, extreme weather events, and other possible climate change impacts over the next thirty to forty years.

The report is at: http://securityandclimate.cna.org/report/National%20Security%20and%20the%20Threat%20of%20Climate%20Change.pdf

 

Afghanistan: The slim possibility of peace and the probability of a longer, wider, more dangerous war
Richard Tanter / Nautilus Institute

Richard Tanter of the Nautilus institute writes that “by virtually every dimension, the war in Afghanistan is getting much worse for both the western coalition and for the Afghani civilian population.” “The strategic benefits are minimal to non-existent... and the risks of a widening war alarming, and the moral and humanitarian consequences appalling”. Tanter argues that “strategic confusion, institutional inertia and self-interest provide most of the answer” as to why the US remains in Afghanistan. “Australia’s commitment shares the same strategic confusion, mixed with a diffuse paternalistic enthusiasm not too far distant from a nineteenth century imperialist ideal of civilising the natives.” Tanter concludes that “the US, and its allies, will leave, without any definable or honourable victory.   The Afghans will stay.” If the current logic of expansion of the war engulfs Pakistan, “withdrawal and defeat will take place eventually, but later, and after an infinitely more catastrophic and dangerous war.”

Read the entire report at: http://www.globalcollab.org/Nautilus/australia/apsnet/policy-forum/2008/tanter-afghanistan-longwar/

(Richard Tanter, Austral Policy Forum 08-12A, 27 October 2008)