Can We Trust CSR Checklists? Where is the Transparency?

Lists that tout companies that engage in corporate social responsibility are “advantageous” says Dal LaMagna, who founded Tweezerman, a Long Island, N.Y.-based beauty products company formed 21 years ago.  “Lists let companies market to their customers and help consumers pay attention.  They show those customers that the company doesn’t exploit.”

But he notes that there is a significant drawback to such lists: “You really can’t say you are a socially responsible corporation, because you aren’t.  The practice of CSR is an ongoing process, not an end-point.  It’s an intention and if the company has that intention, then it is trying to practice CSR and who’s to say it isn’t?”  

Tweezerman and CSR

When LaMagna founded his company, there wasn’t much hype about corporate social responsibility.  In fact, he says it wasn’t until he was at a trade show in Baltimore in 1994 that he heard the term.

But, that didn’t stop him from adamantly excluding from Tweezerman all practices that he had found abhorrent in other companies, and endured as an employee.  Instead of exploiting workers, LaMagna wanted to pay fair wages, offer health care and flextime, and give back to the community–essentially creating a company that adopted principles of corporate social responsibility.

But still, when LaMagna sold the company in 2004 to J.A. Henckels–and shared the profits with all employees–Tweezerman wasn’t on any CSR list even though it committed a share of its profits to charitable causes, paid living wages to its workers and offered a package of employee benefits, practices that appear to continue with the new owner.

So, I’m confused.  I admit it.

About CSR lists

If I am a consumer or investor passionate about CSR, and I want to reward or invest in the company that best walks the talk, where do I turn?

Fortune says UPS, Starbucks and Marriott International are the top three corporations in social responsibility for 2010.  But, Corporate Responsibility Magazine says Hewlett-Packard, Intel and General Mills are.  And the Ethisphere Institute, which looks at the world’s most ethical companies categorized by industry, includes HP, Starbucks and General Mills among the top 100, but Intel and Marriott are nowhere to be found. And last year, the Boston College Center for Corporate Citizenship named Walt Disney, Microsoft and Google as its top three, but the originator of Windows is #14 and Disneyland’s  creator is #83 on this year’s CR lists. And neither made the top 10 of the 2010 Fortune list.

That’s a problem with lists. People create them–people who may give more weight to a category such as x instead of y, or even ignore z.  Some might allow advertisers to play a role, which adds to the muddle–and lack of transparency. And companies that are “evaluated” tend to be the biggies, even though there are many smaller and mid-sized firms that should be known for their practices.

Enter Consumer Reports, please

So, what to do?  We could keep the big lists–especially if they came with footnotes explaining methodology and possible conflicts of interest.  We could create regional lists to accommodate smaller firms.  Or, we could implore an organization such as Consumer Reports to create the metrics on which any company could be evaluated–either by a Fortune or Jane Doe, consumer.

The Consumer-Reports-like group would accept no advertising dollars and be beholden to no group.  It would start with the premise that CSR involves the 3 P’s–people. Planet and profits.  It could then refine that list, parse it, provide objective ways for an outsider to evaluate the company in those areas.

Then, we’d know who was great in philanthropy efforts and who had a ways to go with energy efficiency.  We’d know which had a great employee environment, but lagged behind in community efforts.  And, we’d know that the rankings were based on the same criteria and that the same methodology was used.  We’d know that it was just and we wouldn’t be confused.

For the latest in CSR List Mania, check out BC Upham’s piece

Jennifer Hicks is a freelance journalist and the lead editor of SmartBrief on Sustainability, a free daily e-newsletter that offers a round up of the day's most important news for businesses and consumers interested in sustainability issues. Her work has appeared on several health, business and political Web sites.