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How Toy Giants Hasbro and Mattel Match Up on CR

By Tina Casey


How do corporate responsibility and public reputation impact a company’s stock performance? A look at the recent history of Hasbro and Mattel provides anecdotal evidence that CR does support strong stock performance — but only if the company is effective in focusing and promoting its CR actions.

In an exclusive email interview with CR Magazine, JohnWeiss, Director of Ceres’ Company Network, offers this insight:

While it’s always difficult to show causation, there is some evidence of a connection between environmental and social performance and strong management systems, which is a factor in a company’s stock price. Some companies that outperform on environmental and social issues — that is, they’re effectively managing risk — also benefit from a lower cost of capital, which can contribute to a better stock price. I think we can expect to see more people studying this question in the years ahead, and developing even more robust conclusions, as the data set continues to grow and covers an increasingly long period of corporate performance.

Both Hasbro and Mattel have made a credible effort on key CR issues in recent years, including environmental issues. One main point of contrast, though, is that Hasbro has been more successful at integrating corporate citizenship with its public image.

Coincidentally or not, Hasbro is widely considered the “gold standard” in toy manufacturing, and despite a selloff last year it continues to outperform Mattel by a wide margin. As of this writing Hasbro stock is trading at about $95, compared to about $16 for Mattel. Rumors of merger are currently flying.

Hasbro and Mattel: Checking off the CR Boxes
On the surface, Hasbro and Mattel appear to have similar CR profiles, and both have been awarded for their efforts.

Most recently, CR Magazine recognized Hasbro with the #1 spot on its “100 Best Corporate Citizens List for 2017.” The award marked Hasbro’s sixth straight year of appearing on the list. Mattel also earned a spot on the 2017 list. However, it ranked much lower on the scale, at #56.

It’s All About The Environment Now Without digging too deeply into the 100 Best Corporate Citizens List methodology, a review of the CR histories of Hasbro and Mattel provides some clues as to why they are so far apart in the rankings.

Hasbro traces the birth of its CR record to the establishment of the Hasbro Charitable Trust in 1983, charged with “improving the lives of children and their families around the world.”

By 1993 the company realized that handing off CR duties to an independent foundation has its limits. That year the company adopted supply chain standards under the banner of “Hasbro Global Ethics Principles,” following up with the Hasbro Environmental Principles in 1994.

In 2002 Hasbro earned charter member status in the Climate Leaders initiative launched by the U.S. Environmental Protection Agency (EPA). Since then, the majority of its CR highlights have focused on the environment.

Mattel is also an early CR adopter. The company established a charity in 1978 and, like Hasbro, soon realized that integrating CR into its corporate culture was a more effective strategy. Mattel drew up its own Global Manufacturing Principles in 1997 and issued its first CR report in 2004.

The main difference between the two companies’ approaches is Hasbro’s more assertive pursuit of environmental and supply chain improvement. That contrast came into sharp focus in 2007, when Mattel drew a storm of negative press — and $2.3 million in civil penalties — over hundreds of thousands of toys contaminated with lead paint, originating from its overseas factories. By 2011 Mattel recovered with a more robust oversight program, but just a few years later it stumbled into an ongoing dispute with the organization China Labor Watch over conditions at its factories.

Meanwhile, Hasbro has been leveraging its relationship with the EPA to garner a regular stream of favorable publicity over its environmental actions.

In 2015 the company became a member of the EPA’s Green Power Partnership in recognition of its renewable energy certificates (REC) purchases. Aside from the environmental benefit, the REC program enabled Hasbro to publicize its support for the U.S. wind industry:

Hasbro purchased 9,319 megawatt-hours of Green-e Energy Certified RECs, which represents 100 percent of its U.S. electricity consumption in 2014. This REC purchase supports U.S. wind power and will avoid GHG emissions equal to growing 164,767 trees for 10 years.

The EPA relationship also enabled Hasbro to stakeout a leading position in the emerging climate action movement:
Hasbro’s renewable purchase qualifies the company for the U.S. EPA’s Green Power Leadership Club, a distinction given to organizations that have significantly exceeded the U.S. EPA’s minimum purchase requirements. Green Power Leadership Club members must purchase ten times the partnership’s minimum requirement organization-wide.

Last summer, Hasbro built on its U.S. track record to pledge 100 percent renewable energy across its global operations, including REC’s and the purchase of carbon offsets.

Talking the Talk Hasbro topped it off its run of good publicity by earning a longform interview in Newsweek in December 2017, under the headline, “At Hasbro, sustainability is essential to child’s play.”

The interview enabled Kathryn Belliveau, Hasbro’s Senior VP for Global Government, Regulatory Affairs and Corporate Social Responsibility, to lay out the company’s environmental actions for Newsweek’s large audience of general readers.

With the strategic focus on environmental issues, Belliveau was able to deploy key words and language that are coming into the public vernacular, such as “environmentally friendly design,” “environmental footprint” and “design for end of life.”

A Hasbro-Mattel Mashup? In an interesting twist, last fall rumors surfaced that Hasbro was poised to acquire Mattel. The news died down for a few weeks, but as this article was being prepared, both companies’ stock spiked up and the speculation was rekindled.

Hasbro and Mattel were not available for comment in this article. However, with public consensus finally emerging on climate change and other critical environmental issues, it is apparent that Hasbro is speaking with a stronger voice, in a language that investors and the general public understand. If Hasbro does bring Mattel under the umbrella of its corporate culture, the pace of progress on CR issues could accelerate across the toy industry.

This article was originally published in CR Magazine

Tina Casey headshot

Tina writes frequently for TriplePundit and other websites, with a focus on military, government and corporate sustainability, clean tech research and emerging energy technologies. She is a former Deputy Director of Public Affairs of the New York City Department of Environmental Protection, and author of books and articles on recycling and other conservation themes.

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