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Raytheon, the Diversity and Ethics Pacesetter

Leon Kaye | Monday June 4th, 2012 | 1 Comment
raytheon, corporate governance, Leon Kaye, corporate social responsibility, environmental stewardship, ethics, ethics training, military spending, defense contractors

Raytheon issued its corporate responsibility report last week.

Can a U.S. defense contractor truly be socially responsible? Why not? Military spending does have its benefits. Raytheon has long been a corporate social responsibility trailblazer to the point that many other companies in the Fortune 500 should be embarrassed. Does the company plant trees and have a leading zero waste program? Well, not quite. But what the company has provided its employees for years is a workplace where inclusion and diversity are not only mentioned, but expected. Raytheon has scored a 100 percent rating from the Human Rights Campaign for its inclusive hiring practices; in other words, the company does not care if you are straight as long as its weapons systems shoot straight and the communications systems don’t crash. Take that, ExxonMobil.

But diversity is not the only reason why Raytheon is a solid case study of corporate responsibility. Considering the tangled relationship between government agencies and defense contractors, the company’s internal corporate governance practices are a model from which other corporations could learn. Then add the energy efficiency programs that are also ramping up throughout the company’s operations. And finally, Raytheon’s community involvement not only “does good,” but it is smart business. A flip through the company’s 2011 Corporate Responsibility Report serves up a wide range of smart business practices. 

Naturally, CSR within Raytheon starts at the top. At a time when the incestuous relationships between executives and board members are doing little but providing fodder for the Occupy movement, Raytheon has maintained a consistent corporate governance structure for several years. Nine out of the company’s 10 directors are judged to be independent by NYSE standards; all of the board’s various committees have directors independent of each other; and limits are placed on the number of boards on which directors can serve. Ethics training is rigorous throughout the organization; employees completed over 150,000 ethics learning modules last year alone. Employees are instilled to make decisions through the lens of ethics instead of short term gain. That culture of openness and transparency is reflected in the company’s commitment to supply chain diversity: $2 billion was spent last year sourcing from small businesses.

Raytheon’s commitment to ethics translates into improved environmental stewardship. The company has set several goals for 2015 and is well on its way to meeting and even exceeding them. The 10 percent reduction in greenhouse gas emissions by 2015 has already been surpassed; currently it stands at 16 percent. The company has also saved $80 million in energy costs since 2002 and is close to reaching its energy efficiency goal for 2015, too. Landfill gas in part powers one of Raytheon’s facilities in Texas. And goals for waste reduction and water conservation will soon be the reality.

Finally, a company that profits off of massive engineering feats and military contracts should work to build a future with even more engineers while helping to take care of the men and women who are serving this country abroad. To that end, Raytheon funds and supports a bevy of math and science programs, including its popular MathMovesU program. And for our troops, the company helps fund the Wounded Warrior Project that trains both injured soldiers and their caregivers. Meanwhile, its HomeLinks program helps keep troops stationed abroad connected to their family via donations of computers and other technologies. Raytheon, in fact, could do even more on this front considering the huge hardships returning veterans and their families are facing in this economic climate. A huge call to action is needed here, but Raytheon is contributing.

If a company’s stock is tied to its environmental, social and governance performance, Raytheon is an example of how social responsibility can actually improve financial performance, than this company is a buy. Its stock has done reasonably well since last November, and with the exception of some recent doldrums that have hit a bevy of companies, this is a company I not only trust, but in which I would invest. In fact, I already did.

Leon Kaye, based in California, is a sustainability consultant and the editor of GreenGoPost.com. He also contributes to Guardian Sustainable Business and Inhabitat. You can follow him on Twitter.

Photo courtesy Wikipedia.


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  • http://www.triplepundit.com Nick Aster

    Good stuff… you know what I’d *really* like to see, however?  A defense contractor with a stated mission to diversify beyond destructive military operations and/or a contractor that has a stated mission to help the military in non-combat operations – the stuff that happens after combat is over in hopes that combat won’t be needed again.