The most frustrating aspect of writing about corporate social responsibility (CSR) is the lack of leadership. Green building has the US Green Building Council, conservation has the Sierra Club, cleantech has companies like FirstSolar, but CSR lacks a leader. In the vacuum, countless consultancies have ranked company sustainability to guide consumers. JustMeans, a CSR website, adds another by launching the Top 1000, a new ranking of mid-large cap companies based on the GRI standards. Maybe this one will stick.
CSR Rankings Lack Credibility
Other CSR rankings have lost credibility through conflicts of interest, inexplicable rankings, and weak metrics. Corporate Responsibility Magazine (CR) has been widely criticized for blatant conflicts of interest, such as the committee deciding the ranking methodology including staff from the ranked companies. Rankings also tend to mistake transparency of reporting for social responsibility, and fail to account for the harm transparent firms cause. For example, Monsanto holds the 20th slot on CR’s 100 Best rankings, despite aggressively destroying small farming internationally, and producing chemicals that harm both human and natural life. CR further undermines itself by issuing “penalty cards” to companies that rank higher than they should. Intel, number two on the list, receives a “yellow card” for violating anti trust laws. Additionally, rankings use “best in class” methodology, but then throw all the classes together for the final list. This has the effect of forgiving firms for destructive products. Exxon is 51 on CR’s list and 48 on JustMeans’ Top 1000. But Exxon sells oil, and fossil combustion is destroying the atmosphere. How is tech consulting firm Accenture, 75 on CR’s list, less socially responsible than that?
Is the Top 1000 any better?
JustMeans’ major advantage is little conflict of interest. JustMeans’ business is to aggregate CSR community in a social media space, then distribute clients’ CSR information to this audience and beyond. It has no stake in how the news is received by the CSR community, urges its own editorial staff not to hold back and notifies the firms they write about, and is indifferent if clients leave because they are upset by the CSR community’s chilly reception. While the rankings are a clear play to incentivize use of its services —each ranking is linked to “News From Company” (via Justmeans) or “Not Yet Updating”— JustMeans has no incentive to game the rankings.
JustMeans also beats CR by using CRD Analytics’ quantitative approach of 200 unspecified GRI standards. In the vacuum of CSR leadership, stakeholders increasingly rely on GRI (the Global Reporting Initiative) as an industry benchmark. [Ed. note: Triple Pundit is sponsoring two GRI certification courses in sustainability reporting this fall. CLICK HERE for more info.]
CRD Analytics’ vague methodology infographic, resembling a data meatgrinder, suggests that its rankings are “forced” based on algorithmic GRI data. Input data, output rankings— but based on the screen of your choice, as the CRD method is “highly customizable”. If only we knew how JustMeans customized it. Without knowing more, CRD/ JustMeans’ methodology seems to involve less discretion than CR’s, which is not explained.
Corporate Knights Still Favorite
Despite being a CSR editorial writer for JustMeans, at least prior to this post, the Corporate Knights’ Global 100 is still my favorite ranking. It is the most robust and transparent ranking available. The Corporate Knights provides an excel spreadsheet of some data, a detailed rationale behind the factors it measures, does the ranking in-house and aggregates multiple data sources. The Corporate Knights explicitly measure factors others don’t, like the ratio of executive to worker compensation, and deals with transparency AS one factor among many. The Corporate Knights don’t limit their evaluation to large cap stocks, instead opening CSR up to emerging firms as well. So while JustMeans Top 1000 is much better than CR’s Top 100, Corporate Knights’ Global 100 bests both, and none are perfect. But, with billions in brand value at stake, it’s worth ranking the rankers.