Business Ethics / Corporate Social Responsibility

Effects of Hurricane Harvey on Company Ethics

Many people know that as the transition between seasons (Summer and Fall) begins to occur, hurricanes become more frequent and even more disastrous. In the peak of hurricane season, a category 5 hurricane drastically affected the gulf-region of America.

It has been almost two months since Hurricane Harvey hit the Gulf Coast and large parts of Texas on August 25th. With winds reaching up to 130 mph, the hurricane was thus named a Category 5. The brunt of the storm was on Thursday, August 31st, as it began to move upward towards Louisiana [1]. In Texas alone, over 33,000 people sought refuge. Unlike other natural phenomenons in the past, Texas has never experienced such a catastrophic one to cause ruin and “life-threatening flooding” [2]. Weeks following these hurricanes, many corporations began to donate large amounts of money to hurricane relief programs.

Since the 1970s, the amount of money given to charitable organizations has increased. TheCharity navigator website shows the statistics of the distribution and overall amount of money America donates. In 2016, $390 billion, which was 2.1% of Gross Domestic Product (GDP), was the total amount given to charities. When adjusted for inflation, this amount increased by 1.4% from 2015.

Also, from the total donations, corporations had donated up to $18 billion in 2016 [3]. Societal values in giving back have become increasingly popular, thus it is no wonder why corporations are publicly, and sometimes privately, announcing their help in donating large sums of money.

In this day and age, Corporate Social Responsibility has increased tremendously. Many businesses in America can be seen improving various aspects in their company, such as minimizing their carbon footprint and improving employee benefits. With this new social change in being an ethically good company to society, these social changes may be an obvious sign as to why many companies are willing to donate large amounts of money to hurricane reliefs.

There have been an astonishing number of hurricanes in the past decade that have caused great destruction and cost towards the affected areas. Wal-Mart, a major controversial industry, is one of the leading businesses in corporate philanthropy. The company has greatly helped in being a leader towards donating and supplying affected families with basic necessities.

Wal-Mart took action after Hurricane Katrina, one of the top five deadliest hurricanes in the United States, hitting New Orleans and the surrounding areas in 2005. The firm donated “$20 million in cash, 1,500 truckloads of free merchandise, food for 100,000 meals, and the promise of a job for every one of its displaced workers” [4].

Wal-Mart, along with Ellen DeGeneres, donated $1 million to Houston Texans player JJ Watt’s Hurricane Harvey relief fund.

In 2008, following Hurricane Katrina, Hurricane Ike devastated large parts of Florida, Texas, Louisiana, and Arkansas. Wal-Mart announced that they would commit $2.5 million to assist with relief efforts; including cash and product donations (food, water, and hygiene products). The company also stated that they would be longtime partners “in the area of disaster response, the American Red Cross, The Salvation Army, and Feeding America [5].

Just 9 years later, Hurricane Harvey is yet another storm that greatly affected the gulf-region of America. Already initiating the plan in matching the two-to-one customer donations, Wal-Mart has reached up to $30 million toward hurricane relief efforts. With the use of technology, Wal-mart is also allowing their stakeholders to donate online to the American Red Cross [6].

From the list of the worst hurricanes in the past decade, Hurricane Katrina seemed to be the storm to start the movement for corporations to help out with cleanup costs and relief programs. This started in 2005. Now in 2017, it is shown, through Wal-mart, that companies are increasing the amount of donations and improving their Corporate Social Responsibility. It will be interesting to see new ways Wal-mart and other companies will enhance their strategies in helping supply resources to the affected areas from natural disasters like Hurricane Harvey.

 

Footnotes

[1]http://www.businessinsider.com/tropical-storm-harvey-hurricane-updates-map-texas-where-landfall-damage-2017-8

[2]http://www.businessinsider.com/tropical-storm-harvey-hurricane-updates-map-texas-where-landfall-damage-2017-8

[3] https://www.charitynavigator.org/index.cfm?bay=content.view&cpid=42

[4]http://www.washingtonpost.com/wp-dyn/content/article/2005/09/05/AR2005090501598.html

[5]https://corporate.walmart.com/_news_/news-archive/2008/09/16/walmart-donates-25-million-in-response-to-hurricanes-ike-gustav

[6]https://www.cnbc.com/2017/09/11/wal-mart-pledges-up-to-30-million-in-hurricane-relief-efforts.html

 

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s