Sunday, 12 June 2011

Some complexities of Corporate Social Responsibility

I can be a bit of a sceptic about 'green' and CSR issues because, although these are important and are undoubtedly part of the corporate governance discourse, they are often just a bandwagon of muddled thinking.

An article in the Times on 10 June illustrates this.
"Electric cars could produce higher emissions over their lifetimes than petrol equivalents because of the energy consumed in making their batteries, a study has found."
Unfortunately, the article is behind a paywall but here's the reference anyway. Quoting from a report commissioned by the government funded Low Carbon Vehicle Partnership, it says that electric cars actually give rise to more CO2 emission than petrol and diesel cars if you take into account their production - and particularly production of batteries - and disposal. What this illustrates is not that nothing should be done about global warming but that CSR issues can be fiendishly complex. Just jumping on any old passing bandwagon can be a mistake, so political and business leaders should take a cautious view and should try to avoid being steamrollered into knee-jerk responses to environmental and 'sustainability' lobby groups. In particular, calls for corporate reporting on environmental issues - an issue promoted by accountancy firms which see large fee opportunities - should be approached with caution. You can easily spend time and money reporting on your firm's CO2 use only to find it is hugely misleading. Of course you may not care about that if it was only a public relations exercise in the first place; but if you were genuinely trying to be open then it may be a  bit disappointing.

The main thrust of the press release that launched the report was to encourage people to take a 'whole life' view of vehicles rather than just focusing on basic petrol/diesel consumption. Interestingly, the Times seems to have had access to the report itself (which I can't find posted on the web), which seems to make electric cars seem even less environmentally friendly than the press release itself revealed.

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