Are Multinationals Good Citizens?
Business Insider has published an interesting article, "Why The World's Most Sustainable Company Publishes CO2 Emissions Next To Its Earnings." It's part of a sponsored "Future of Business" series, which examines how "cutting-edge technologies are rapidly reshaping our world, from how businesses run to how we live."
I don't know about you, but when I see the word "sustainable," I get a bit suspicious. It's one of those jargon words that is applied these days to certain businesses regardless of suitability.
What is a "sustainable" business anyway? Here it is being used somehow to indicate a "program" of sustainability. Presumably that means the company is doing its part to "sustain" the world.
Of course, my feeling is that companies ought to stick to their mission statements regarding the value that they are trying to produce for shareholders. The Earth has been around five billion years – supposedly – and short of a large planet crashing into it, I think its "sustainability" is assured no matter what.
Whether or not a pharmaceutical company is intent on salvaging the planet, this blue orb will keep on spinning, probably long after said pharmaceutical firm has passed on, merged, whatever ...
In this case, the company that is so concerned about the Earth is Danish-based pharmaceutical giant Novo Nordisk. We learn from the article that Novo Nordisk "is particularly committed both to sustainability, and using data to measure it." From the company's website:
Novo Nordisk is a global healthcare company with 89 years of innovation and leadership in diabetes care. The company also has leading positions within haemophilia care, growth hormone therapy and hormone replacement therapy. Headquartered in Denmark, Novo Nordisk employs approximately 33,900 employees in 75 countries, and markets its products in 190 countries.
Novo Nordisk is so concerned about the sustainability of Planet Earth that they were named "the world's most sustainable company by Corporate Knights this year." Other awards have been bestowed as well.
The article quotes Susanne Stormer, "Novo Nordisk's vice president of corporate sustainability." She speaks about "global stakeholder engagement," and how the company employs data to analyze the business impact of sustainability.
We are informed that according to the latest annual report, the company's CO emissions from "energy 2" were down to 93 thousand tons from 95 the year before. Also, the company "was selling cheaper insulin in 75 developing countries up from 67 the year before."
These two facts are published right alongside the 21.9 percent growth in earnings per share. The implication is that being a good corporate citizen adds to the bottom line. Perhaps so.
Stormer doesn't make a direct connection, however, preferring to speak to more ambitious goals. "[Sustainability is] about showing respect for people, the patients that we're serving, and the people who work at the organization."
A "triple bottom line" is written into company bylaws stating that they would conduct their business in a way that is "financially, environmentally, and socially responsible."
And as a result the company has integrated various kinds of reporting since 2004, providing financial results alongside data on environmental and social targets. "The reason why we do that is because we think it's important that when you talk about sustainability, that you don't just [tell] the tree hugger stories and the compelling emotional part of why a company should be sustainable, but ... to hold ourselves accountable to our stakeholders and to drive internal accountability."
There is a practical side to all this, apparently. Novo Nordisk officials believe that their emphasis on social contributions and environmental concerns appeal to certain investors and potential customers.
The article explains that the company has created a series of case studies "showing the social and business impacts of specific measures."
But the way Stormer describes it, these indices measure "value that your work generates to the world ... also how it benefits society."
That's not a value then that drops directly to the bottom line. But Stormer believes the company is on the way to "making [a] business case in a strong and convincing way." We never learn what it is though. Too bad.
There ARE green benefits, however, that drop directly to the bottom line. According to Stormer, "By devising a partnership with our energy supplier we were able to convert from black energy based on coal to green energy based on wind power."
This, we learn "worked out for everybody," because the company is saving money in the long term and the wind power industry in Denmark itself got a boost. "It really was one of these win win/win examples."
Stormer concludes: "In order to be in business for the next 90 years or a 100 years we have to consider how do we interact with society and what does society look like? So the basis for our sustainability work is to say we believe that a healthy society, healthy environment, and healthy communities are the foundation for success as a business."
I've tried to be fair to Novo Nordisk but I certainly have questions about the company's emphasis on green programs and social activism. I noticed in reading the article that outside of some energy savings the firm really doesn't seem to have a firm handle on costs and benefits.
This is significant. Despite all their efforts, company officials seem to have no idea how much their efforts to be a good corporate citizen are costing and how much the company's bottom line is benefitting. If I were a shareholder in this company, I'd want to know such things.
In researching the company, I came across the following press release:
Peter Lawætz Andersen is awarded The Novo Nordisk Prize 2011 ... The Novo Nordisk Prize 2011 goes to Peter Lawætz Andersen, DMSc and Head of Research at the Department of Infectious Disease Immunology, Statens Serum Institut (SSI), for his ground breaking tuberculosis research. His work has improved diagnostics and has resulted in a new vaccine with the potential to eradicate the disease.
A little more searching on the Internet yields the following from New Scientist, Nov. 1979:
'The world's biggest trial (conducted in Southern India) to assess the value of the BCG tuberculosis vaccine has made the startling revelation that the vaccine 'does not give any protection against the bacillary forms of tuberculosis'.' ... The 'exhaustive and meticulous' study, involving 260,000 people, found more TB in the vaccinated group than in the non-vaccinated. After this, scientifically-valid vaccine trials were abandoned.
Holland had the lowest death-rate from TB in Europe due to the fact that it rejected the TB vaccine. The French government forced, by law, the vaccine onto all French children: Prof. Mercie, of the Pasteur Institute, who produced and sold the useless shots, explained 'It helps finance the Institute's research.' TB is now making a widespread comeback, particularly in intensively-vaccinated tropical countries.
Now, one can speculate that the NEW tuberculosis vaccine is better than the old one(s). But at the very least – as part of its "good citizen" effort – shouldn't Novo be informing people that there is considerable trouble with vaccines generally and that specifically, vaccine cocktails are being held responsible for the rise in autism in the West?
This brings up a larger point, which is that the company's good citizen efforts can be interpreted in ways that are negative rather than positive. Even without taking a position on whether or not the concept of global warming is legitimate, one can question whether the company's support for carbon reduction is a sensible idea.
Company officials seem to believe that removing carbon from the atmosphere will help stem global warming. But I'd argue that company shareholders ought to investigate this program and its impact on the company's bottom line. There's no definitive evidence I know of that the world is growing warmer or that reducing the amount of man-made carbon (a tiny percentage) will in any way affect climate trends.
Finally, Novo's main business is related to diabetes care, but it's recently been shown in at least one double-blind test that short, intense bursts of physical exercise can have an extremely beneficial effect on diabetes, especially type 2 diabetes.
If the company really wanted to be a good citizen, one would think that such news would be prominently featured by the company as a way to control diabetes without drugs, or with minimal drug intervention. I didn't see any mentions of this study or its conclusion.
I did check on the company in Wikipedia and found a timeline going to 2010 regarding the company. At the end of the timeline, the following information was mentioned:
- 2009 Novo Nordisk agrees to pay a $9 million fine in connection with the payment of $1.4 million in kickbacks through the United Nations Oil-for-Food Program.
- 2010 Novo Nordisk pulls medicine from Greece due to price cuts triggered by the financial crisis in the country. The act caused uproar among diabetics and relatives.
- 2010 Novo Nordisk agreed to pay $25 million to the US government for illegally promoting its haemostasis management drug, NovoSeven.
- 2011 The Association of the British Pharmaceutical Industry reprimands Novo Nordisk for poor management due to breaching industry codes concerning various promotional efforts for its Victoza diabetes medicine.
Obviously, Novo officials want the company to be a "good corporate citizen," but like any other multinational corporation, Novo's REAL agenda is probably considerably different than its stated one.
The very largest companies are surely involved with what we call the "power elite" and their agendas have not only to do with making money but also with extending and solidifying globalism.
A lot of Novo's contrived public persona seems aimed at reinforcing globalist memes having to do with green conversation, carbon sequestration and alternative energy. Each one of these "dominant social themes" is scientifically questionable and may not add much if anything to the bottom line.
If I were a Novo shareholder I'd be quite skeptical of the company's "good citizen" efforts and would regularly re-evaluate my investments – or even contemplate a reduction.
Novo's efforts seem more based on PR than reality. And unfortunately, when it comes to multinationals, Novo is not alone.
Posted by taxesbyanyothername on 01/07/13 06:39 PM
That link is to the correct site but does not even list the article I intended.
sodahead . com / united - states / earths - atmosphere - co2 - impoverished
shows a graph of atmospheric temperature and CO2 content all the way back to the precambrian.
Posted by taxesbyanyothername on 01/07/13 06:33 PM
There is nothing wrong with a company of whatever size working to minimise their production of polution or other deleterious envronmental impacts, nor with advertizing the fact that they do. However, CO2 does not qualify as a polutant, and most companies advertizing their good stewardship of the envronment are either using subsidies rather than profit as a business model, or they are doing it out of self-defense because they are in competition with companies that do.
Click to view link
Posted by mava on 01/06/13 11:34 AM
When a company advertises itself as a "sustainable, green, earth-friendly", they are telling us that they are the prostitutes. Which is quite normal, accepted, and certainly is nothing new. Most entities around us are prostitutes (be it to the government, politics, or mass opinion), and it is one of the survivalist tactics.
These days, there are vast numbers of complete idiots amongst the population. They believe in various memes that the government is spreading. One of them is the sustainability, green, etc. Of course, any company that actually believes in such memes would immediately lose to it's competition. Therefore the art is to make it look as if the company is really minded about sustainability, but try to spend as little as possible, while benefiting form the support these idiots do provide to such companies without any reason.
So, why does the government promotes this meme? For two reasons. First, it helps to reduce the power needs of the usa, which is the part of the plan to survive the dollar collapse, and second is that anyone that follows any stupid meme such as sustainability is a prime subject of manipulation. It is sort of a lakmus test that shows that a person is welcoming any foreign direction, and will act on it, against it's own benefit. In other words, if you belive in sustainability, you are just the kind of a fool that is useful during tough times, because he can be told to sacrifice himself, and he will do it.
Posted by dave jr on 01/06/13 11:15 AM
In regard to your statement,
"I noticed in reading the article that outside of some energy savings the firm really doesn't seem to have a firm handle on costs and benefits."
I forgot to tie in that in the wonderful world of monopoly, budgets don't really matter or can be written after the fact. So long as it is deemed 'sustainable' profit is virtually guaranteed as price is in the column of social cost. There must be an atmosphere of bizzaroland at the top of these firms.
Posted by dave jr on 01/06/13 10:18 AM
I can only imagine that a corporation in the fold of global monopolies would have an entirely different view of profit. It would merely be an indicator or gauge to assist in setting price. Likewise, CO2 or carbon foot print would be a gauge of a companies energy intensity, which has to do with effiency, which is important for profit in the true marketplace of competition. Sustainabilty then measures the success of keeping the ruse going, and stakeholders (instead of shareholders), many of whom are in govt., then have a stake in upholding the ruse.
The ruse is that we have a free market.
Posted by fuggeddabodit on 01/06/13 01:32 AM
Too off topic I suppose? ;-) Not even an answer to my mailadress. Where is it best to contact you in matters like mine?
Reply from The Daily Bell
We have emailed you.
Posted by IndyLyn on 01/05/13 11:13 PM
ROFL - ol' grey ghost says: "Does anyone else remember when the word "green" meant, besides the color, "immature," "inexperienced," or "naive?" Funny thing."
Posted by 1776 on 01/05/13 07:03 PM
The Commission on Presidential Debates is a private corporation headed by the former chairmen of the Republican and Democratic parties. The CPD is a duopoly which allows the major party candidates to draft secret agreements about debate arrangements including moderators, debate format and even participants. The result is a travesty riddled with sterile, non-contentious arguments which consistently exclude alternative voices that Americans want to hear.
This documentary also reveals the big corporations who 'sponsor' the CPD and how third party candidates are purposely excluded. One of these sponsors, Annheiser Busch, is partly owned by Senator John McCain's wife. Former Minnesota Governor Jesse Ventura's election as an independent candidate proves that opening up debates can lead to real change - something the entrenched Republican and Democratic Parties don't want to see.
Who's Afraid of an Open Debate? The Truth About the Commission on Presidential Debates (Full Version)
Click to view link
Posted by wfende on 01/05/13 06:24 PM
Dr. med. Werner L. Ende
Medical Specialist for Internal Medicine and Laboratory Medicine
c/O W. Bockel
D 83435 Bad Reichenhall
mailto:werner.ende@Click to view link
for more than 30 years I worked as physician.
I can't say, that we had bad experience with Nordisk Insulin and other antidiabetica working in a hospital for internal diseases during the seventies and eigthies
Today my vision of the benefits of some drugs the "Big Pharmaceutics" have marketed has changed a lot.
In connection with intensive researchs not only on Austrian Economics but especially on the global influence on politics by the Anglo-American Powerelite - having read
Flynn, Rothbard, C. Lewis and just now Family of Secrets: the Bush Dynasty, America's Invisible Government, and the Hidden History of the Last Fifty Years -
it is hardly surprising, that Nordisk like Merck(*) and other big pharmaceutics are doing such a bad job as You pointed out in this well-researched and presented article.
And last but not least, i would like to remark:
The Daily Bell belongs together with Click to view link Daily to my most appreciated online magazines.
(*): conc. Merck: "Do Painkillers Kill? "by Werner L. Ende MD url: Click to view link
Dr. Werner Ende 6. Januar 2013
Posted by Friend_of_John_Galt on 01/05/13 05:57 PM
The terms "social responsibility" and "sustainable" (with respect to the environment) are public relations terms that some companies (especially highly visible multi-national corporations) use to improve their public perception. Hopefully, they don't spend (waste) too much money on that area, since it rarely adds significantly to shareholder value and is generally more likely to simply reduce the overall value of a company. It does have some value as a PR matter, especially if the company does not waste many resources on these "socially responsible" or "green" priorities. In some cases, highly visible multi-nationals may be forced (by governmental extortion) to support various green initiatives -- where I suspect the wind-energy project may have been an example.
Not so long ago, British Petroleum -- having changed its name to "BP" was advertising "BP means Beyond Petroleum" -- with commercials showing photos of fish and other natural scenes. Mention of research on various non-oil energy projects was usually included. These commercials seem to have been shelved subsequent to the BP drilling platform "blow out" in the Gulf of Mexico -- that the U.S. Government has used to extort considerable sums from BP -- even forcing the ouster of the BP chairman.
As for Novo Nordisk, the reports at Click to view link suggest a fairly good future (from the public pages): As the leading provider of diabetes care products, Novo Nordisk benefits from decades of accumulated research and marketing experience, sticky customers, scale advantages, and a strong patent portfolio. These competitive advantages, coupled with favorable market dynamics, should enable Novo to continue to earn returns well above its cost of capital during the long run. [end quote]
FWIW, the large HMO handling my health care has announced that the Insulin provided them by Novo Nordisk over the past few years will be replaced with another brand, claiming lower cost and "equal quality." So, N-N is subject to competition and, as usual, when one company seems to be obtaining extraordinary returns, other companies are drawn into that market. (This is what capitalism is all about.) Any company wasting money on "social responsibility" or "green" projects is likely to become non-competitive -- and the more spent outside the primary focus of the company, the more quickly any competitive advantages will be lost.
What I look for in a company (especially as an investor) it one that focuses on what they do best and does its best to increase shareholder value (by increasing the value of the company). To me, this is the highest "good" that a company can do. Of course, I expect that a company will perform its work in an ethical manner and in compliance with the existing rules and regulations (though many of such government imposed rules and regulations are not rational).
I do not expect companies to squander money on social programs or green projects if they do not directly advance the company interest -- otherwise, such spending is counterproductive. There are times where a company might receive positive publicity for (as an example) providing seemingly extraordinary benefits to employees (such as child-care facilities, or other "socially responsible" things), but if this allows the company to recruit and maintain an above-average workforce that is more productive, then such "socially responsible" practices may make good economic sense (and would not be a basis of compliant).
I note that I am not positively swayed by claims of "green products" appearing on the supermarket shelves. Indeed, my suspicion is that such products may be less effective (and usually more expensive) than their non-green competitors. If the "green" product offered improved economics, then it likely would have already been on the market in the past...
Posted by rossbcan on 01/05/13 04:14 PM
"sustainable" is about non-economic metrics. The "point" is to allow unproductive self-decreed "stakeholders" influence over your business and, to capture some market share from those whom believe in these "values".
and, if you have to "propagandize" how great you are, clearly, you are not so certain you can stand on your own merits, in the unbiased opinions of those you seek to trade with. Presumably, these "immaterial" (unmeasurable) "values" are "hoped" to be worth something to those whom don't fully consider objective (measurable) value.
Posted by firstname.lastname@example.org on 01/05/13 02:56 PM
The only really "sustainable" aspect in all these discussions is that we continue to deny that the human species will be one of the shortest ever to "occupy" (or inhabit) the Planet. We are a disasterous species bent on self destruction and everything around us. We are a malignat incurable cancer that is sure to outgrow our own survival. This beautiful yet tempestuous "blue planet" will outlive us by billions of years. Alone that plastics with their endocrime modulating chemicals will ensure our demise within the next hundred thousand or so years. Besides the very real possibility that a wide spread nuclear holocaust spewing plutonium into the atmosphere (and there are no safe levels of this highly toxic isotope)will make life "non-sustainableä" as well as all living matter. Then again another heavenly body from the universe like the one that struck 65 million years ago is as certain as the universe itself. So we humans should relax and enjoy life without perpetularly cultivating fear-mongering. But the Orwellian scene cannot and will not be denied on that score. The evolution of his predictions has already come to pass making his forecast the only real sustainabiliy until the horizon glows from either another meterorite or rash of accidental or intentionsl nuclear explosions.
Posted by GoodBusiness on 01/05/13 02:29 PM
Just send this to all of the State and local elected politicians - let the Power and money return to the States and end Federal agencies and unelected bureaucrats picking winners and losers. A Article V State amendment as outlined below can make DC smaller - weaker and back under the four Corners of the ORIGINAL CONSTITUTION. The power would return to the many States and to representatives that we the people can meet face to face expressing our concerns - ever tried to meet with a DC Congress person or a Senator?
The following movement is taking hold and gaining popularity as it spreads across the 50 States DC will start recognizing that their days are numbered. Liberty and Freedom Restored and State powers returned to protect we the people from the tyranny and oppression now coming from DC. Come join the fight.
Click to view link
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Posted by recon77 on 01/05/13 02:08 PM
I have had exactly the same suspicions. The first place we saw sustainable crop up was literally WITH crops. I am in agricultural research so I became naturally suspicious of the word. Lo and Behold, there was/is not a clear definition. It started out supposedly as a term meaning to somehow farm in "balance" with nature ecologically speaking. Again, it was never clearly defined, and I noticed PROFIT was not even IN the definition. What farmer can farm sustainably without PROFIT? Now, I see sustainable education talked about (it seems to translate to "democracy" in education, further decoded to mean communism). Now, sustainable in agriculture has social justice thrown in to the mix. You are suspicious with good reason.
Posted by Ol' Grey Ghost on 01/05/13 01:57 PM
I remember when a "sustainable company" was one that was making enough money from the business it was engaged in to cover all its operating cost with a dab of "net profit" on top...
Click to view link
Click to view link
Does anyone else remember when the word "green" meant, besides the color, "immature," "inexperienced," or "naive?" Funny thing...
Posted by kentek on 01/05/13 12:07 PM
If they are concerned about the CO2 emissions they should forbid their 33,000 workers from exhaling.
Posted by 1776 on 01/05/13 11:43 AM
Carbon and Life
-It is hard to overstate the importance of carbon; its unique capacity for forming multiple bonds and chains at low energies makes life as we know it possible, and justifies an entire major branch of chemistry - organic chemistry - dedicated to its compounds. In fact, most of the compounds known to science are carbon compounds, often called organic compounds because it was in the context of biochemistry that they were first studied in depth.
-What makes carbon so special is that every carbon atom is eager to bond with as many as four other atoms. This makes it possible for long chains and rings to be formed out of them, together with other atoms - almost always hydrogen, often oxygen, sometimes nitrogen, sulfur or halides. The study of these is the basis of organic chemistry; the compounds carbon forms with metals are generally considered inorganic. Chains and rings are fundamental to the way carbon-based life forms - that is, all known life-forms - build themselves.
-Silicon is capable of forming the same sorts of bonds and structures, but opinion is divided on whether silicon-based life forms are a realistic prospect - in part because it needs higher energies to form them, and in part because whereas carbon dioxide (one of the main by-products of respiration, a process essential to all known life) is a gas and therefore easy to remove from the body, its counterpart silicon dioxide (silica) has an inconveniently high melting point, posing a serious waste disposal problem for any would-be silicon-based life form.
EPA official's 'crucify' comment continues to draw fire Apr 27, 2012
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Thanks. Missed that one.
Posted by bionic mosquito on 01/05/13 10:57 AM
DB: What is a "sustainable" business anyway?
BM: Profit relative to capital structure.
Profit and loss ensures that those that are most judicious in the use of resources relative to market demands will survive. Prices, the most important communication tool known to man, ensure that resources are allocated to those who value them the most.
Resources to those who most value them + profit and loss to ensure the most efficient survive = the most sustainable businesses, and in fact the most environmentally friendly.
Any interference in this formula results in the waste of resources. As governments around the world interfere in this formula every day and with every action, it is clear that governments are the largest environmental wastrels on earth.