March 02, 2008
Measuring Companies with a Ruler of Responsibility
by Anne Moore Odell
With 21 return businesses from the 2007 list, CRO's 100 Best Corporate Citizens 2008 ranks
large-cap companies' corporate responsibility.
Intel claims the top position in CRO
(Corporate Responsibility Officer) Magazine's list of 100 Best Corporate Citizens 2008. The list
highlights the top performing large-cap companies for their responses to environmental, social and
governance (ESG) issues. This marks the second year that CRO has published the list and the ninth
consecutive year the list has appeared.
Dennis Schaal, editor-in-chief of CRO
Magazine said, "Corporate responsibility is no longer viewed as an optional, add-on program by
companies. It isn't viewed as a matter for the folks in the Philanthropy Dept. to take care of.
Instead, companies view it as a way to gain a competitive edge, to save money, and to boost their
statures with various stakeholders, from shareholders to employees and potential employees. I would
say the key trend is transparency, with companies, especially publicly held companies, realizing
that they have to put it all out there as much as possible."
CRO partnered with IW Financial, a provider of ESG research and
analytics, to compile the list. CRO and IW Financial looked at eight categories of corporate
responsibility for the 2008 list: Climate Change, Employee Relations, Environment, Financial,
Governance, Human Rights, Lobbying and Philanthropy.
"IW Financial was approached by the
CRO to work on the 100 Best list and to help develop top 10 in industry lists for a number of
different industries," said Mark Bateman, director of research for IW Financial. "IW Financial
helped CRO make determinations about the issues they wished to cover and developed methodologies
suitable to evaluating the criteria that CRO selected."
The universe of companies under
consideration for the CRO's 100 Best Corporate Citizens included 1,000 of the largest US companies,
as defined by the Russell 1000 Index. "We decided to focus on major corporations because we wanted
apples to apples comparisons, as much as possible, and because we wanted to focus on companies that
have huge impacts on the world," said Schaal. "I'm talking about global corporations that might be
doing business in 150 countries. It's difficult to weigh their efforts, and the challenges they
face, against a regional or local manufacturer, for example, however exemplary the smaller
company's efforts might be."
CRO plans to publish the 100 Best Corporate Citizens among
small- and mid-cap companies in their July/August 2008 issue.
The top ten companies on the
list are Intel, Eaton, Nike, Deere & Co., Genentech, Corning, Humana, Bank of America, ITT and
IW Financial and CRO examined the numbers driving these companies' responses to ESG
concerns. CRO and IW Financial also included companies' alleged transgressions in their
consideration of which companies should make the cut. CRO has a "penalty box" for companies that
could of made the100 Best list except for scandals the companies faced. The companies in the
"penalty box" include Bristol-Myers Squibb, Chevron, Eli Lilly, ExxonMobil, Hewlett-Packard,
Mattel, Merck, and Travelers Companies.
Schaal explained to SocialFunds.com: "Being on
this list doesn't mean you are Mother Theresa, Desmond Tutu or Elie Weisel. The companies on this
list are mammoth corporations, and even Intel (No. 1) and Gap (No.61) faced some recent
challenges. Intel is the subject of antitrust investigations, and a contractor of a Gap supplier
was caught using child labor. The list is a way to assess 'the best' among major global
corporations, to measure their citizenship practices against one another."
Bateman added, "To understand how seriously a company takes CR, it is important to monitor the
company's policies and practices over time as well as the level of disclosure they maintain.
Companies that are engaged in PR tend to have relatively poor transparency when you analyze the
specifics of their disclosures. They also tend to have poor follow through and don't continually
strive to improve across multiple ESG dimensions."
The 100 Best list is more than just a
pat on the back for the companies that appear on it. CRO's list can be a helpful starting point for
investors interested in an unbiased ranking of companies' corporate responsibility practices.
Furthermore, the list is a useful tool for businesses. Appearing on the list might help companies
Robert Lane, chairman and CEO of Deere, told CRO, "We know from our own
experience that current employees and future employees want to work for a good corporate citizen.
This is an important trend that is showing even more strength with new employees."
more and more companies publishing sustainability reports and official responses to climate change,
the face of corporate responsibility has changed greatly over the past decade:
ago, only the most forward-thinking companies were thinking about corporate citizenship in the
broadest sense," Schaal said. "Today, corporate responsibility as a profession inside companies is
growing at a dramatic rate and the question isn't whether to embark on sustainability programs, but
how. Of course, one of the biggest differences is that climate change issues are on everyone's
agenda. Thank you Al -- I invented the Internet -- Gore, and others."