Over the past couple of months, China’s response to expanding concerns over the safety of products manufactured there has ranged from the execution of the former head of China’s food and drug administration, to a complete disavowal of any responsibility for enforcing foreign standards.

The latter is evident in a quotation that caught my eye in an Associated Press article, “Toys just 1 danger imported from China,” published on August 18th in response to Mattel’s latest announced recall of 19 million toys manufactured in China. When the China National Light Industry Council trade group hosted a panel on toy standards, Zhang Yanfen, secretary of the panel, claimed that “the quality of Chinese-made toys with American brands should be the responsibility of the American brand owner, not the Chinese manufacturer.”

But if that is the case, why has a company like Mattel, a leader in its industry with respect to setting and overseeing health, safety and environmental standards, been forced to recall millions of children’s toys due to lead paint and other safety issues?

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On Tuesday August 7th, I joined members of KLD’s staff and summer interns to pay a visit to the Boston College Center for Corporate Citizenship. There, we enjoyed presentations given about the Center and its affiliate, The Institute for Responsible Investment (IRI).

The Center and IRI are closely aligned with the mission of KLD. Both are doing some wonderful work and research in the areas of socially responsible investing and corporate responsibility. IRI is working on projects ranging from emerging markets to responsible property investment. In addition, IRI is wrapping up a study on non-financial reporting and the findings should be available in the first quarter of 2008. For more information about the Center and the IRI visit http://www.bcccc.net/.

At the end of July, the US federal government passed bills in the House of Representatives that would provide legal protections to investment managers who sell holdings in companies involved in key sectors of Iran’s or Sudan’s economy.

Several weeks ago, Florida became the first US state to pass a law requiring their state pensions funds to divest from companies operating in Iran’s oil and mining sectors. Other states including Michigan, Texas, and Illinois are seeking to pass similar legislation.

This comes on the heels of a very successful Sudan divestment movement that started in Illinois and has since been implemented in various forms in over a dozen states.

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In the litany of failed technologies introduced by industry leaders, Sony’s Betamax—a videotape technology superior to its rival, VHS—probably leads the 20th century list.

Topping the 19th century list is Edison’s direct current (DC) electric transmission. At low levels, Westinghouse’s alternating current (AC) seemed a more efficient, safer means of transmitting power locally.

It may be that Edison had it right. DC allows transmission across greater distances with less power loss than AC. That may be crucial in bringing more wind and solar power on line. Suitable sites for wind and solar farms tend to be far away from the cities they’d supply. So says the July 26 Economist.

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According to The New York Observer, the Blackstone principals were not on the floor of the New York Stock Exchange when their IPO opened.

But The Man in The White Suit was. Tom Wolfe, legendary author of among others The Bonfire of the Vanities was making his first visit to the Exchange floor.

“All the years I’ve been in New York, I’ve never been on the floor of the Stock Exchange. So, a friend of mine, who knows a member, got me invited. I’m walking around and I see these television cameras. Somebody in the television crew spots me. I don’t even know where he was from. So, he says to me, ‘What do you think of this Blackstone I.P.O.?’ I’m joking, I say, ‘I think it’s the end of capitalism as we know it.’”

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Neutral is rarely considered an optimal condition, save for scuba buoyancy and, increasingly, with respect to carbon exposure. An eclectic roster of entities have announced aspirations to achieve carbon neutrality, including HSBC, Google, Super Bowl XLI, Silverjet and the 2008 presidential campaigns of John Edwards and Hilary Clinton.

As these initiatives have attracted positive recognition in the marketplace, more entities have caught on to the reputational benefits accruing from neutrality. This has, in turn, created a virtuous cycle or a “race to the top”. Or has it? A growing chorus of stakeholders has begun to question the net benefit of carbon offsets.

In an attempt to distill truth from fiction, F&C Investments has put out this excellent Guide to Carbon Offsetting. This four-pager is well worth the read for the carbon curious, committed and skeptical.

Recently, on a radio show looking at oil company behavior and high gas prices, a senior economist at the American Petroleum Institute, an industry trade association, made the claim that oil companies are regulated not only by their customers, but also by those who hold stock in the companies. True.

The economist went a bit further to say that the federal government need not broaden oversight of oil company practices because those companies are already accountable to the American public, mostly because the American public are shareholders in oil companies. False.

While this oil industry economist’s opinion is a good reminder of the increasing role that sustainable investing and shareholder activism should play in the corporate accountability movement, it is also a reminder that a corporation needs to be accountable to all of its stakeholders, not just the ones who are fortunate enough to own shares of the company. This is particularly true when a business argument cannot be made for improved social responsibility.

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“Antitrust” is a word that has long outlived its usefulness. We need a new word – or set of words – that captures society’s imperative to regulate economic and social relations with its corporate creations.

Who recalls why we’re against trusts? At least beyond a vague, queasy feeling about collusion, hidden power, price fixing and political corruption…

In the US, business trusts arose in the 1880’s and 90’s to hold controlling interests in corporations. At that time, state laws existed that restricted ownership of corporations to in-state residents, limited the corporation’s ability to do business across state lines, and imposed capitalization restrictions. Since the trusts were not incorporated, however, these restrictions did not apply to them.

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