100 Best Corporate Citizens 2007
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Environmental responsibility. Corporate governance and ethics. Fairness toward employees. Accountability to local communities. Providing responsible products and service to customers. Maintaining a healthy rate of return for investors. Those are just some of the challenges of responsible business in the 21st century, challenges that are being met head-on by the 100 companies listed. These are the 100 Best Corporate Citizens for 2007—companies that are proving that good corporate citizenship and good business go hand in hand. The 100 Best Corporate Citizens list takes a systematic approach to assessing the social and environmental characteristics of a good corporate citizen. The list is drawn from approximately 1,100 publicly held U.S. companies in the Russell 1000, S&P 500 and Domini 400 indices, relying on extensive data collected by KLD Research & Analytics, an independent investment research firm in Boston. Now in its eighth year, the 100 Best Corporate Citizens list was developed by Business Ethics magazine, with statistical analysis designed by Sandra Waddock and Samuel Graves of Boston College. This is the first year the list has been published in CRO magazine, which salutes the 100 Best companies for their leadership roles in corporate citizenship. See the full list now (pdf). Highlights of the List Corporate responsibility is included with the SME Toolkit from IBM. Last year, the information technology company approached the International Finance Corp. (IFC) of the World Bank to help improve a technology platform the IFC offers for free to owners of small- and medium-sized enterprises (SMEs) in the developing world. In the SME Toolkit, IBM saw a chance to use its technological expertise to address economic development, job creation and a more equitable distribution of wealth in emerging markets. The new business management platform, which will also be available to women- and minority-owned businesses in the United States, will offer a versatile set of guidelines and tools for entrepreneurs to learn accounting practices, connect with other entrepreneurs or simply download purchase-order forms. The project is an example of how Armonk, N.Y.-based IBM links good corporate citizenship with good business practices, a strategy the company sees as essential to the future of the corporation—and one that helped push IBM to sixth place on the 2007 list of 100 Best Corporate Citizens. “We don’t think you can survive without integrating business and societal values,” says Kevin Thompson, IBM’s Manager of Corporate Citizenship. In addition to addressing societal values, IBM’s corporate citizenship strategy has two more goals. First, IBM aims to work on projects aligned with “what we do well,” according to Thompson. Second, the company seeks projects offering potential business opportunities. The Toolkit fulfills both: IBM’s technology will improve the Toolkit’s functions and in turn, IBM will build relationships with companies in growing markets. These companies, IBM hopes, will eventually turn to it for their business needs. "We are addressing core social problems while simultaneously working with a market segment of strategic importance to IBM,” Thompson says. Serving the community in traditional as well as innovative ways is one of eight categories considered in compiling the 100 Best Corporate Citizens list. Corporate governance practices, diversity policies, employee relations, environmental practices, human rights issues and product quality and safety are also weighed in addition to total return to shareholders over three years. KLD Research & Analytics, an independent investment research firm, compiles the data and creates a ranking system by assigning points for strengths and weaknesses in each category, and giving each category equal weight in the final scoring (For more on how the list is compiled see Methodology). The list represents the best corporate citizens as measured by performance in the eight stakeholder categories. It is not a list of perfect companies. These are firms with oftentimes far-flung, complex operations, whose performance is not always ideal. Despite good intentions and best efforts, they may not always succeed at correcting persistent problems. As the list of 100 Best Corporate Citizens has evolved over eight years, so too have the challenges of doing business in a fast-paced global economy. Take the issue of labor rights abroad. Any company sourcing supplies from countries with a history of exploiting workers raises concerns because of potential human rights violations. Most apparel and footwear companies as well as technology companies on the list, however, rely on factories throughout Asia, Latin America and Africa where workers may be forced to work overtime for low pay, or aren’t free to organize unions. The problems linger, but in the last five years KLD says it has seen evidence of some collaboration on tough issues involving companies, international and national institutions, non-governmental organizations, and labor groups, among other stakeholders. Nike (No. 3), once a poster-child for sweatshop abuses, is a leader among apparel companies pushing for improvements throughout its supply chain. Now the Beaverton, Ore.-based shoe and apparel company wants to get at the reasons why suppliers don’t comply with Nike’s standards, and expects to find some answers within its own company as well as with the factory management. One idea being explored: creating strong human resources management at the factory level to tackle excessive overtime. Nike hopes factory owners will see lowering turnover and investing in workers is profitable. The company wants to get to the point where the “worker has stopped being seen as a commodity and is being seen as a value-added piece of the manufacturing process,” says Hannah Jones, Nike’s Vice President of Corporate Responsibility. Nike is one of five consumer companies, in both cyclical and non-cyclical business, in the top 10. In addition to Timberland (No. 8), Starbucks (No. 9) and General Mills (No. 10), the consumer companies include the list leader, Green Mountain Coffee Roasters of Waterbury, Vt. Green Mountain is the first company ever to rank first two years in a row. IBM, which is the only other company to have topped the list twice, in 2000 and 2002, is joined in the top 10 by semiconductor chip makers Advanced Micro Devices (AMD) (No. 2) and Intel (No. 5), as well as Motorola (No. 4) and Agilent Technologies (No. 7). Another challenge for Green Mountain is measuring the social effects of its advocacy work in coffee communities. By studying whether farmers are able to stay in their communities year-round, and whether they are able to reinvest in their farms, the company hopes to measure how its efforts affect poverty and hunger in coffee growing communities, says Rick Peyser, Director of Coffee Community Outreach and Social Advocacy, a new position at Green Mountain. For fiercely rival semiconductor giants AMD and Intel, scoring well as a corporate citizen has involved cooperation as well as competition. Following in the footsteps of the apparel industry, AMD and Intel, as well as several other technology giants, are working together to develop guidelines and monitoring procedures to address social and environmental concerns at their factories. The effort is at the toddler stage and has yet to prove itself, but the aim of the Electronic Industry Code of Conduct these companies have created is to establish a common set of expectations, and to streamline monitoring procedures to avoid duplication. “It’s almost a paradigm in how the world can regulate itself going forward,” says Dave Stangis, Director of Corporate Responsibility at Intel. The top 10 companies also represent firms with a consistent track record at corporate responsibility. Intel, Timberland and Starbucks have been among the 100 Best all eight years. Overall, the top 10 represent a trend among many corporations to be more accountable to a range of stakeholders in their companies, not just shareholders. All of the leaders have published corporate responsibility reports, most referencing Global Reporting Initiative (GRI) guidelines. Protecting the environment is an important criterion for making the list. And this year, the environment was high on the agenda for many companies, with an increasing focus on using sustainable materials and on tackling climate change. Among the top 10, eight companies are members of the U.S. Environmental Protection Agency’s (EPA) Green Power Partnership. These are businesses with a commitment to use green power for at least some portion of their electricity needs. Four of the top 10 are EPA Climate Leaders that work with the government devising strategies to address global warming. Missing from the list and from the top 10 for the first time ever is Hewlett-Packard. Like many companies on the list, the Palo Alto, Calif., computer company has an impressive record in giving to the community, creating a diverse, fair workplace and actively protecting the environment. But last year, HP was charged with using illegal methods known as “pretexting,” or pretending to be someone else, to investigate leaks of information from the board of directors. Patricia Dunn resigned as Chairman of the Board last September in the wake of the scandal, and HP paid $14.5 million to settle civil charges with the California Attorney General. The company is still under investigation by the U.S. Securities and Exchange Commission (SEC), the U.S. Department of Justice and the Federal Communications Commission. Twenty-four newcomers made the list this year. Joining office furnishing companies Herman Miller (No. 14) and Interface (No. 16) is first-timer Steelcase (No. 17), the creator of the Think chair, an office chair made out of 44 percent recycled material, and designed to be recycled when no longer needed. Steelcase’s leadership in environmental design is one reason for their making the list, but the company is also recognized for charitable giving and support for education. In 2005, the company helped plan and finance the West Michigan Center for Arts and Technology, an educational center for at-risk urban youth and a training center for underemployed adults. Steelcase, of Grand Rapids, Mich., helped design the center’s space as well, using environmentally benign materials and lots of natural light. “It was the convergence of certainly our first three priorities: education, diversity and economic development, but also our priorities of health care and the environment,” says Brian Cloyd, Steelcase’s Director of Corporate and Community Relations. New to the list this year is Google (No. 30), while Microsoft (No. 41) returns after a hiatus of several years. Google, of Mountain View, Calif., receives high marks for providing some form of equity in the company to all its regular employees, and for encouraging its engineers to devote 20 percent of their working hours to independent projects. Microsoft, of Redmond, Wash., gains kudos for bridging the “digital divide” between technology haves and have-nots around the world, for accommodating disabled workers, and for providing restricted stock options to most employees. But both companies have faced anger from human rights groups over censoring Internet content in China. In late January, Google and Microsoft announced that they are working with Yahoo and Vodafone, as well as human rights groups, academics and socially responsible investors to develop a set of principles to protect human rights for Internet users worldwide. The companies stand for “maximizing free expression,” as well “access to information,” and for allowing individuals to use the Internet without threats to their freedom, says Bob Boorstin, Google’s Director of Policy Communications. Another issue that snared companies on the list this year was the backdating of stock options. The practice largely occurred in the stock market boom of the late 1990s and early 2000s so executives could gain from a dip in their company’s stock price. Aside from the inflated payoff to the option holders, backdating presents problems because a company’s annual revenues may appear higher. According to KLD, more than 100 cases of improper backdating are under investigation by the SEC and others. Three companies on the list, Autodesk (No. 47), Hansen Natural Corp. (No. 91) and Coherent (No. 93), face informal levels of inquiry. The options backdating scandal demonstrates how far off perfection is among all corporations. SEC investigations, labor violations and disputes over cleanup of toxic pollutants pepper the records of even the best corporate citizens. Still, corporations that made the list are all making substantive efforts to improve society and do less harm to the environment in measurable ways, often because it is simply good business. The more corporations link good citizenship with good business, the more real and sustained their efforts at improving society and the earth are likely to be. “Where we are really focused is in integrating business and societal values,” says IBM’s Thompson. “We feel for this to be sustainable long term, it needs to be linked and directly connected in terms of what we do with our business operations.” Agree or disagree with the companies that made our list, or have any other thoughts to share? Let us know by emailing us at editorial@thecro.com. We welcome your feedback. Find out more about the methodology behind the list... |
Learn more about the list: |
Abby Schultz, author of this article, is a freelance journalist specializing in business and environmental issues, who has written for The New York Times, Fast Company and Fortune Small Business.
Do you have feedback or questions about the list? If so, post your comments below. (Please note, all comments are on a time delay so that they may be reviewed for offensive or inappropriate language.)
Options
The options backdating scandal demonstrates how far off perfection is among all corporations. Regards, Mickey
100 top corporations social responsibility
Where is Stonyfield Farm, Inc. probably number one in the country.
Categories
I'm interested in finding out exactly what the categories are. For instances, what is TRA?
student project
I'm running a regression model in this list for a class, and if anyone knows what TRA stands for that would be great. I assume that it is some measure of the companies' 3-year annualized return, since that is what they use to measure the financial returns of the company. Also, does anyone know how the "average score" is weighted among variables?
Thanks
You gotta be kidding!
This list is clearly bogus. How could Mattel possibly make the list? Mattel puts it's profits ahead of children's safety and I can not for the life of me see how this could qualify as being a good corporate citizen. Completely outrageous!
Here's my thoughts...
I would suggest, if it can be known, within reason, "who is underperforming", which btw, must be assumed to any not on the "list"?, that rather than a goal of avoiding their goods and services the goal should be to offer solutions and suggestions as to how they can change...sometimes it is ignorance behind the failure and not intentional disregard.
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'Big' Domination
It's interesting that the list seems to be dominated by big companies. This means one of two things. It could be that the evaluative criteria used are biased in favour of big firms (in which case they ought to be fixed). The other possibility is that, on average, big firms make better corporate citizens, a thesis that is strongly at odds with many people's perceptions (though that doesn't make if false). (FYI, there's a small but useful literature about the various ethically-significant ways in which small-and-medium enterprises -- SME's -- differ from big firms. See, for example, Laura Spence, "Does size matter? The state of the art in small business ethics," Business Ethics, A European Review, Volume 8, Number 3, July 1999.) Kate, MD Editor Female Herbal Viagra Project
Big is who they started with
If you check the Methodology section, you will see that they only use firms found on the Russell 1000, S&P 500 and Domini 400 indices.
Criticism should be accompanied by supporting evidence
It is easy draw a conclusion based on assumptions. It is quite another matter to support the conclusion with factual evidence. To be suspicious of claims is prudent. But the list here merely suggests with its title that these 100 companies are the 'best' corporate citizens. If they are truly bad corporate citizens, the rest would be worse.
Appear to please Stakeholders and get them out of the way!
Inclusion on this list appears to be a strategic plan by certain corporate citizens to stay ahead of stakeholders that may in some way interfer with their ability to conduct future business. This pro-active jesture undercuts most frontal assults and forces third party groups like the government, the community and social activist groups to dig deeper to uncover concerns. I would not be surprised if there was a fee that was paid by each of the corporate citizens included on this list to solitify their position.
ODU_MSR_560
Modern Day Slavery
It is not to surprising that human rights ranks at the bottom of the list. Only six out of the hundred companies have a score of 1.0 or better. Have we truly gotten rid of slavery or do we just call it something else now like cheap labor? Human dignity is worth more than anyone of these criterias. We wonder why our society is in such a state of moral decline. How can we teach our kids to value life when some people are more valuable than others. There needs to be a set minimum wage for the entire world. Corporations have not taken enough responsibility in improving human rights. Most corporations rather hide behind false doctrines of social responsibility. If corporations really want to help communities then they should stop oppressing weaker societies. There should be less community giving and more emphasis on human rights. Human rights is not about making people content but its about seeing our brothers and sisters as more than mere animals.
Grad Student
Modern Day Slavery response
The world would be a better place if this was the case. However, money is always the motivational factor for why the world; the economy is the way that it is. Yes, there should be continued emphasis on human rights and also continued support and care given to communities.
Dear Grad Student
Just because you use big words in your statement doesn't make it intellectual or correct. Your lack of understanding of how business operates is disgusting. Of course corporations are going to try to give the least amounts of benefits to its employees. THEY COST MONEY. In the long run maybe it will pay off by attracting better employees or promoting better efficiency. That factor alone is why a corporate, if they are going to try to appeal to people with good values, only promotes higher than the industry standard. Please keep your liberal garbage off of the internet and stay out of business because your going to flop a company.
Sincerely,
An Annoyed Reader
Are you aware?
Do you realize that you contradicted yourself and made the other person's point? "In the long run maybe it [benefits to its employees] will pay off by attracting better employees or promoting better efficiency."
Dear Annoyed Reader (Your mind is a landfill)
It is clear you are a brainwashed fool. Please quarantine your filthy thoughts, as you are the one who is disgusting. Being concerned for human suffering is not garbage. Please seek education now, and in the meantime stay out of the business of spouting opinion because you might just flop our world.
White Male ?
In my repeated experience, this kind of intentionally insulting, negative response to humanitarian concerns and impulses usually comes from white males, which makes such un-hearted responses very conspicuous indeed, and says a lot about this MINORITY's motives and priorities.
??White Male??
WELL OF COURSE IT IS A WHITE MALE! DON'T YOU KNOW! THE WHITE MALE IS TO BLAME FOR ALL PROBLEMS WHICH EVER OCCURED IN CIVILIZATION. THE WHITE MALE IS AT FAULT FOR ALL THE PROBLEMS OF THE WORLD. THE FEMINAZIS HAVE CASTRATED THE WHITE MALE. THE OTHER RACES HAVE SILENCED HIS VOICE. IT WOULD SUCK TO BE A WHITE MALE. ANY OTHER RACE IN THE WORLD CAN SAY AND DO ANYTHING THEY WANT. IF THE WHITE MALE SAYS WHAT HE FEELS, HE IS OBLITERATED. HOW MANY RACES CAN SAY THE 'N' WORD AND NOTHING HAPPENS, IF A WHITE MALE DOES THAT THEN HE IS VAPORIZED.
CRACKER PLEASE!
about the white male
Setting aside the discussion going on here, I do have to agree with what you said about the white male. I don't know how it happened but it's true... it seems his rights to free speech or anything else has been shoved aside and minority groups are top of the list.
What do you suppose could be done to change it? Do you think the roles of husband, father and leader have been taken or do you think they have been laid down by the white male? Please, don't take offense here, I mean no disrepect I am merely asking for your opinion. Oh, and I'm a white female!
Dear Annoyed Reader
I'm not sure which big words you were referring to, but he brings up an extremely WELL SUPPORTED point. He notices that human rights scores are embarrassingly low for these supposedly wonderful companies. Maybe instead of criticizing the grad student for his big words, your should fight the evidence by picking up a book or researching the terrible situation that fair trade practices are struggling to reduce called slavery.
I'll use one big word for you called RESEARCH. Get some facts before slamming his "liberal garbage". Large companies often use unfair trade practices unabashedly, see for instance Nike's huge child labor scandal that was only corrected by public relations, not necessarily action. If you like the idea of children slaving away, bleeding, making your shiny Nike's, I hope you find some happiness in life.
Undergraduate Student
Economics 101 says that employees are a cost liability.
Businesses have NO obligation to employ people or be members of any imaginary or real 'community'.
They do have a SACRED DUTY to lower COSTS for their SHAREHOLDERS.
I think many people are mesmerized by liberal economists into thinking that somehow business has an 'obligation' to people. The whole concept of human 'rights' is something alien to businesses. Incorporating these 'rights' in business would require reengineering the entire business environment, something that could not be accomplished without MAJOR disruptions. Would you accept sharing your divine rights voluntarily? Its like asking Americans to car pool. No.
So put any thought that businesses owe people or nations aside, its simply not true. Quite the opposite. Nations are constructs so that corporations can divide up the rights to intellectual and physical properties and yes, even people.
They exist at the will of their corporate masters.
People should be very grateful to business for providing the jobs they do. Often, they aren't necessary.
Perhaps its done for sentimental reasons.
Econ 101 Reply - please take Econ 102 as well
I don't know why I feel compelled to write this...the author of the above probably won't return to view my reply and doubtless is entrenched in an ideology that would resist anything I claim here. But this is moronic. If it is true, in the sense of accurately describing what people think, it only serves as a reason to take up arms and shot anyone who owns or manages a corporation. If it is true, then non-owners, non-managers are really in a peasant slave class. So if the author is so confident that businesses simply have no moral responsibilities, that they are above respecting universal human rights, above having to follow God's commandments, above working within secularly contracted moral codes, or any other basis of ethics...the workers have no obligation to be grateful at all...rather, they should treat corporations like they would treat any dominating amoral threat...destroy them.
I am always amused that neolibertarians so willingly admit the facts that motivate socialist revolutionaries. Anti-capitalism only persists because of this kind of misreading of the moral defense of capitalism laid down by Adam Smith. And oddly, it is this kind of neolibertarian idiot that so confidently thinks he's the one who understands the true essence of capitalism. From Smith's perspective, society allows the shareholder and entrepreneur to seek their own interest only because structures are in place to ensure that this benefits society (no monopolies on materials, information, markets, etc.) So, it is the corporation who should recognize its indebtedness to the general citizenry for allowing it to exist. Our neolibertarian is an anti-capitalistic oligarch...and given the limited choice, I'd prefer the socialist revolutionary to him. I hope he takes a few more courses that Econ 101.
Sorry for the rant...
You need to ask you self the
You need to ask you self the question of "Where do the corporate masters" get their money from? without the "buy levitra" the corporate masters would have nothing. Your implication that some how "People" live and exist at the leisure of "corporate masters" is down right laughable and absurd. It is like saying the farmers need the land owners to survive. When in fact it is the other way around. It is this kind of thinking from you and every other "Corporate Master" who get us involved in so many conflicts around the world. You should remember that you every time in history, a group of people adopted your line of thought and acted on it, they were quickly reminded of its consequences. If you do not believe me, put it to the test, Publicly proclaim your view as your corporate motto. You will see how quickly "The people who should be grateful for the job they do" and every other "Coporate Master" and governement turn against you. Thank god not all heads of industry believe in your garbage. Or else another revolution would be necessary.
Economics 101 says that employees are a cost liability
You need to ask you self the question of "Where do the corporate masters" get their money from? without the "people" the corporate masters would have nothing. Your implication that some how "People" live and exist at the leisure of "corporate masters" is down right laughable and absurd. It is like saying the farmers need the land owners to survive. When in fact it is the other way around. It is this kind of thinking from you and every other "Corporate Master" who get us involved in so many conflicts around the world. You should remember that you every time in history, a group of people adopted your line of thought and acted on it, they were quickly reminded of its consequences. If you do not believe me, put it to the test, Publicly proclaim your view as your corporate motto. You will see how quickly "The people who should be grateful for the job they do" and every other "Coporate Master" and governement turn against you. Thank god not all heads of industry believe in your garbage. Or else another revolution would be necessary.
Human rights IS business
Businesses have 100% of an obligation to be members of a community. Without a community, i.e. demand, businesses would not exist.
The concept of human rights may be alien to the core of laissez-faire business but, the US would still be in the sweatshop era of our industrial revolution were it not for incorporating human rights into the workplace.
Minimum wage, safety and health administrations, child labor laws, fair and equitable wages, unions, anti-discrimination laws, and the list goes on.
You're right, it would require reengineering an entire business environment, we did it, now look where we are. However, you are wrong in that businesses don't owe pepole and nations, on the contrary, businesses owe them their very existence.
As a nation who has already "been there, done that" we have the skills to spread corporate responsibility to the world. If this sounds like a liberal economists statement then so be it, I mean heaven forbid we help other nations lay the same socio-economic groundwork that the greatest economy in the world did!
Maybe instead of Economics 101 we should be taking History 101.
Econ 101
Even a light read of Adam Smith, the patron saint of capitalism, will make clear: market capitalism is meant to benifit the public i.e. every day folk. Whether or not you adhere to or agree with the guidelines of market capitalism, understand that the system currently in place is completely detached from Adam Smith's original thoughts. The bottom line is NOT supposed to be lining the pockets of greedy corporate shareholders, it's supposed to be the overall PUBLIC INTEREST. Do some research before you start preaching your econ 101 nonsense.
Subjectiiiiiiiiiive
This list seems to be very subjective. All of the research comes from one firm. The rating system penalizes a comany if it does not respond or give information to KLD. To make it even more entertaining, KLD profits off of getting this information. Essentially, if a company does not give KLD what they want, then they will be punished for it and if they do then KLD profits. Additionally, as is mentioned in the methodology of attaining this list, a negative three rating was given to Mortorola for paying the chief executive and board members what KLD considers "excessive". Excessive? Are you kidding me? Who is KLD to pass judgement on what Motorola's board and CEO are paid. It would be interesting to know how this relates to the environment/community/human rights/product/etc. This list is a valuable starting point for determining a company's effort in being socially responsible, but the subjective nature of the report should be dually noted.
SGO
Fair is in the eye of the beholder
No matter what guidelines or ranking system is used by doing so you must find an objective way to choose the top company and conversely the bottom. This method appears to make a solid attempt to define a good corporate citizen and then hold them to a quantifiable litmus test.
This chart has equal weights to all components, thus it finds your position relative to all reviewed companies and averages the 8 results in an attempt to compare apples to apples while starting with apples and oranges. If they weighted the raw scores companies who were average everywhere could make the list without being in the top 100 in any category by just avoiding any adverse results.
The points made about environmental impact rings true. Some industries by there nature must inflict harm to the environment to provide goods they produce. Breaking down a list by sector or sub-sector would provide interesting information and allow people to make more informed decisions about what types of companies they like to deal with.
The points of fair share of good that can be created is valid, however I believe the concern of unfairly comparing a companies good deeds because of lack of money is a very small list, the nature of the size of the companies involved allow all of them to give $100’s of thousands of dollars annually to their communities. I would agree by weighting the charitable contributions as a percentage of profit would be an equitable way of looking at these companies.
ODU 560 -- JAC
KLD’s ranking methodology - Is it fair?
I have the following comments on KLD’s ranking methodology that I feel could be construed as biased or unfair by some.
1. KLD assesses the performance of each company eligible for inclusion on the 100 Best Corporate Citizens list in eight categories and then assigns a raw score for each of the eight variables for each company. To arrive at a score, KLD takes the net of the strengths and concerns in each of the categories and normalizes the data by comparing the raw score to the average score of all companies. This exercise is repeated across the remaining categories. The overall score is the unweighted average of the eight categories. I feel by comparing the raw score within each category to the average score of all companies introduces bias in the measurement. A company like an oil refinery or coal fired power plant who by the nature of their business would be polluting more than say a bank or insurance company would fare poorly in the environmental category. A more balanced approach would be to compare against the average scores of related industries which engage in similar kind of activities.
2. Companies making record profits should be held to a higher standard for their role as corporate citizens. Therefore, scores assigned in the various categories should adequately reflect this point. Are these corporations truly shouldering their fair share of responsibilities towards society based upon what they can afford to spend in this area. In my opinion, each company’s contribution in each of the eight categories should also factor in that company’s potential to do good.
3. No consideration is given to the size(e.g. net asset worth) of the company when assigning scores for philanthropic activities in the community category. An industrial behemoth with thousands of workers, enormous assets should be expected to shoulder greater social responsibility. Therefore, scores assigned to all companies particularly in their contributions in the community, environment and product sectors should be statistically adjusted for their respective sizes.
ODU_SB_560
The system attempt to quantify "Good Will" and corporate values.
No matter what guidelines or ranking system is used by doing so you must find an objective way to choose the top company and conversely the bottom. This method appears to make a solid attempt to define a good corporate citizen and then hold them to a quantifiable litmus test.
This chart has equal weights to all components, thus it finds your position relative to all reviewed companies and averages the 8 results in an attempt to compare apples to apples while starting with apples and oranges. If they weighted the raw scores companies who were average everywhere could make the list without being in the top 100 in any category by just avoiding any adverse results.
The points made about environmental impact rings true. Some industries by there nature must inflict harm to the environment to provide goods they produce. Breaking down a list by sector or sub-sector would provide interesting information and allow people to make more informed decisions about what types of companies they like to deal with.
The points of fair share of good that can be created is valid, however I believe the concern of unfairly comparing a companies good deeds because of lack of money is a very small list, the nature of the size of the companies involved allow all of them to give $100’s of thousands of dollars annually to their communities. I would agree by weighting the charitable contributions as a percentage of profit would be an equitable way of looking at these companies.
ODU 560 -- JAC
Better Corporate Citizens!!!
This analysis of companies is NOT accurate. Each company has a different ethical mission and focuses within the industry so there will be heavier weights on different issue. With that factor playing a greater role, the other entire "corporate citizen" deeds are almost cancelled when calculating the average. To add to a greater matter, if this analysis is based off of a scale from one to four, why is it that the highest company's, Green Mountain Coffee Roaster, only received a 2.148 average? It is unethical to consider these companies a being a good citizen when they have NEGATIVE ratings/scores in some ethical categories. How does that account for companies being a good citizen when they are not TOTALLY fulfilling their duty as a responsible corporation? Better ethical practices within businesses needs to establish, in order to be considered as for this analysis. Yes, many corporations are striving to make improvements (mainly for financial opportunities or reasons) but there must be an equilibrium across the board...not just in one classification. If these corporations are the best...then there should be a higher standard of being "BEST CORPORATE CITIZENS."
-H.L.
Corporations=Power
Corporations have a social responsibility because they have come to hold so much power. What better subject to set standards and make an impact on society than the companies that relate to our everyday lives? For instance, Nike, that have a major responsibity to take control over factory workers pay and working conditions. It is Nike who has the power to set trends for smaller up and coming companies. Although they have yet to completely tackle this issue, my whole point lies in the fact that major corporatons have a major impact on the way in which we as citizens live. I believe that this top 100 list encourages them to continue with their ethical responsibility and continue to make bigger and better efforts.
SF
HBS Study:
Harvard Business School report:
Do Corporate Social Responsibility Ratings Predict Corporate Social Performance?
http://hbswk.hbs.edu/rss/5542.html
Short answer: not really...
Good Corporate Citizenship?
Since when did it become the role of business to be a good citizen? It seems to me that all this 'good citizenship' stuff costs money which business passes along to the consumer. The role of business is to make money for it's stockholders and produce the best product for the best price. Like it or not, we live in a capitalist America. Let me be a good citizen with the extra money that I have in my 401-K and with the money I save that is passed along to me when the businesses I support don't spend money on being good citizens. Let people be good citizens, don't put that responsibility on business.
DF
Good Corporate Citizenship?
Why do you think any money saved would wind up in your 401-k? If you didn't know, a corporation is an individual as far as the government is concerned and they actually have more rights. For the priviledge of having those rights, there are responsibilities. Unless you are covered by a union contract, your 401-k matching could be discontinued tomorrow. It happened here where I work. Companies who are not good corporate citizens are responsible for most of economic and social woes while hiding behind the oldest lame excuse for screwing someone, "It's nothing personal it's just business". It is very personal to me when any company affects me or my decendants by not being a good corporate citizen.
BH
Are you a good citizen?
I am sure the families of women who have benefited from Avon's efforts to raise 150 million dollars toward fighting breast cancer, or any of the other populations that have benefited from charitable efforts by other companies on the list would whole heartedly disagree with you. I am wondering how much of that money you speak of in your 401-k will be used to contribute to charities or things that would benefit others?
You are correct that you live in capitalist America which means you can choose not to buy from any of the corporations on this list. You can continue to pad the pockets of those corporations that choose to think like you do. You may also want to educate yourself on the criteria that was used to rate the companies. I would suggest taking a second look at the last indicator. The list is as follows: Environmental responsibility, Corporate governance and ethics, Fairness toward employees, Accountability to local communities, Providing responsible products and service to customers, Maintaining a healthy rate of return for investors.
CH
Ahhh what are you thinking DF?
You could then easily say that a bank robber is a good businessman until he gets caught. What's wrong with corporations deciding that maybe it's a good idea to make products that don't kill the user, exploit the workers or pollute the environment (see the first point)? Money doesn't matter if there's no one to spend it.
SB
Rights = Responsibility
Since when did it become the role of business to be a good citizen?
Since corporations retain the same rights as an individual. If they have the same rights, they are citizens, and thus have the same responsibility.
Corporations are not people
Corporations do not have the same rights as an individual. A corporation is not a person; it doesn't have a soul, can't feel guilt, has no morals or emotions, and can't be good or evil. (When you think of an evil corporation, you're usually thinking about a few people who work for the corporation). A corporation is a legal entity -- a device that helps us write laws concerning large groups of people getting together to do something. The way it works is that in a very few ways, the corporation is treated as if it were a person.
Therefore, where we say a corporation should contribute to social welfare, we're saying the shareholders should contribute, and that it makes more sense, for whatever reason, for them to do it through their corporation than by spending cash dividends from the corporation.
Corporations are people or citizens
Corporations got granted the right of citizenship in 1886 because of the supreme court case Santa Clara County vs Southern Pacific Railroad. At the lower court levels, the question of whether corporations were persons had been argued, and these arguments were submitted in writing to the Court. However, before oral argument took place, Chief Justice Morrison R. Waite announced: "The court does not wish to hear argument on the question whether the provision in the Fourteenth Amendment to the Constitution, which forbids a State to deny to any person within its jurisdiction the equal protection of the laws, applies to these corporations. We are all of the opinion that it does," (the equal protection clause).(http://www.answers.com/topic/santa-clara-county-v-southern-pacific-railroad)
The court decision, written by Justice Harlan in favor of the Southern Pacific Railroad Company, consists of a lengthy discussion of various technical factors and does not rely upon or include the determination that corporations can be classified as "persons" according to the Fourteenth Amendment's equal protection clause. However, the court reporter, J. C. Bancroft Davis, inserted Chief Justice Waite's comments as "Statement of Facts", even though Chief Justice Waite stressed to Davis that the court did not rely on this information to reach its decision.(http://www.answers.com/topic/santa-clara-county-v-southern-pacific-railroad)
Because of this "Statement of Fact" written in by the court reporter, which was not agreed to by any of the judges, became the law. So legally corporations are people under the 14th amendment and have all the same legal rights as normal citizens. Which is the reason why the should have moral, ethical, and social responsibilites to better the world like every moral walking, talking, breathing, citizen because that is what they wanted to begin with. Oh by the way the whole case was originally about the company avoiding to pay taxes to the state(county) on the property that they owned.
AB
Corporations are people
You point makes no sense. People make up corporations. Without people, they would not function or even exist. People at corporations do have souls, they can feel guilt, they (should) have morals and emotions, and can do good or evil.
Corporate personhood is where America went wrong..
Yes, corporations are people, at least legally.
Clearly, you haven't been reading the news for the past 150 years or so.
They have far more rights than flesh and blood people. Plus they cant be put in jail and they rarely die.
That poses the question, does govenment exist by them or for them. Most would say both.
Money buys access. One dollar, one vote.
But nations are afraid because corporations have more power than they do. They make or break nations and leaders.. Nations are seen as convenient constructs for corporations to buy and sell the rights to us, but they could easily do it some other way, when it suits them. And they will.
all mixed up
I think we are getting confused between Civil Rights (which corporations have some of) and human rights (which corporations have none of) eg. the right to life. If we continue to talk about human rights, they are not dished out on a quid pro quo basis with responsibility. Human rights are not for the government or anyone else to give or take. They are intrinsic. Additionally, I do beleive that corporations have a responsibility to their shareholders over all else. However they are in fact executing this reponsibility by being good corporate citizens and being proactive on climate change because this is what shareholders now want as well as corporate profits. In this way we can see a corporation is no more than the sum of its shareholders and that we as individuals control the destiny of corporations either by our purchasing vote or shareholder vote. These votes are all that should or do matter to corporations and emotional rants and lobbying corporations have never made any significant difference to companies in the past. I am pleased that corporations are soulless and heartless profit seekers, because in that way we are not subject to any questionable moralising - the robot follows the monetary command of the human master.
The idea that being a good
The idea that being a good citizen costs money is being questioned more and more. In fact, elements of being a good citizen (reducing waste, treating your employees well, making decisions with long-term sustainability in mind, and I could go on) are also extremely good for profits and by extension, profit-centered shareholders like yourself. My argument is made in the context of your point of view of business, which is as a money/profit factory and nothing more. A separate argument, one that you don't seem quite ready for, would be that large businesses like those in this list are so well equipped to positively impact the world, that it almost becomes irresistable, even at the shareholder level. Where your argument around the wishes of management and the wishes of the shareholders becomes valid is when management does not fully disclose the do-gooder things they're doing. In that case, it is little more than doing the wrong thing (deceiving your shareholders about how you spend their money) for the right reason (making the world a better place to live), which is, of course, wrong. As long as the companies fully disclose what they are doing in terms of philanthropic activities, you can then choose not to buy their stock. Those of us that do, will laugh all the way to the bank (back to my original point).
Think again
It is the role of *everyone* to be a good citizen. After all, what would be the opposite? How can you propose certain entities might be exempted?
Responsibility lies with us all. That includes the responsibility of being a positive role model. And that's good for business too.
Good Corporate Citizenship
Businesses being good members of the global community may or may not have been their role in the past, but increasingly must be part of the way they operate in the future. Examples:
1) In the past businesses could emit greenhouse gases with no concern for the externality impacts. We now know that the air and water have a price, in terms of both use and sustainability. Left to their own devices, most companies would ignore the impact of 50-100 years out (for our children and grandchildren) and continue to pollute. Globally, the collection of governments must do something to address this, whether carbon tax, carbon credits, etc.. Yet governments have even shorter election cycles than many boards, so they fail to act too.
2) This is compounded by the migration from countries to companies as the largest economic entities in the world. Last time I did the research, there 52 companies and only 48 countries in the world's largest economic entities. The UN is, so far, ineffective at global governance politically, and would be totally ineffective at global corporate governance. If we allow companies to operate unfettered per their own rules, we exacerbate problems such as climate change.
DF's position is consistent with the libertarian view of parts of the US in which he lives. Yet many of us don't live in the US. While I admire much of what the US is and does, its self-absorption with its way as being the best, the only and the final way is questionable. Economic and military might won't fix all - witness Iraq.
PAE
Evolution of business
Businesses, like the cultures in which they operate, evolve in many ways, not the least of which is in the area of their understanding of their social and environmental responsibilities.
While I agree that it could be fairly called an abdication of a business's responsibility to its shareholders for that company to indulge in a host of costly good works that are unrelated to its business path, it is also important for real costs to be paid - for there to be an ongoing tension between a company's desire to avoid unnecessary costs and society's need for social and environmental costs to be paid at the point where such costs are incurred.
I worked for 9 years for a company that, in the 80's and 90's, was at the forefront of the corporate social responsibility movement. Some of the things that we did in the name of this idea were naive - even wasteful or dumb, but most were a good faith, if imperfect, effort to recognize costs that tend, in the rush to shed expense, to be passed on to communities, employees, suppliers, and government regulation.
I'm no great fan of government regulation, but it does seem to me that many such regulations at least begin as well-intentioned efforts by some combination of the populace and the governmental institutions we create, to mop up costs that are deferred by the way we conduct business. Truth to tell, I think that, despite businesses' reflexive negative reaction to regulation, in a lot of cases they prefer that costs be absorbed by government than by having to fold those costs into the price they charge for their products and services. In some cases - health care being a pertinent example - this may be the most efficient and fair strategy. Thus we now see Wal-Mart stepping up to advocate for something like universal health care.
For the most part, I don't fault businesses for trying to shed costs. There are egregious and even immoral examples of this impulse, but most of the time the impulse to shed costs is consistent with the ecological principle that no life form can afford to waste its limited resources doing things that are not necessary. The definition of 'what's necessary is the rub, as there are competing constituencies trying to establish that definition.
Especially in a globalizing economy, the pressure is tremendous to keep costs low as a way to avoid losing market share and jobs to places where even fewer social costs are recognized and paid. The 'race to the bottom' is not a figment of our imaginations, and even many people who at some level support globalization - in some ways the natural evolution of business structures - find themselves waking up one day and seeing the community, cultural, and environmental impacts of globalization and saying, "Jeez, I didn't want it to end up like this."
Wouldn't it be preferable for us to understand fully where the products we use come from and the full costs associated with their production and distribution, and to pay those costs as we go, rather than to scramble around finding some way to mitigate those costs some time "after the horse has left the barn?"
It's true that no business can pay a social/environmental cost that its customers won't pay. This is the nub of the problem for corporate social and environmental responsibility. People want the world to look as they think it shoud, but will - inderstandably - buy a cheaper product when their circumstances require personal economy, even if it means that the business that is trying to be honest in acknowledging and paying for its impacts loses the sale. Accordingly, it does take the presence of a thoughtful civil society community and a wise approach to government to point out and, ultimately, demand that, at some point along the chain, the real costs of our commerce be assessed and incorporated into the price of our goods and services, either as a price increase for the product or as a tax on its production or use.
For a great example of how social and environmental costs are not being acknowledged and paid in the way we produce and distribute food, "The Omnivore's Dilemma" by Michael Pollan is a brilliant and very circumspect read.
APVT
I Agree....
I agree, we need to know who is underperforming so we can help prompt change by avoiding their goods or
services.
Hopefully that way we can go some way to help ensure that all companies at least get up to a level that is
acceptable.
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