In the months since 3BL Media launched this year’s 100 Best Corporate Citizens list, I’ve been asked one question more than any others: why is Altria in the top ten? Don’t their products kill people?
Yes—and the company still earned its place as “one of the best corporate citizens.” How is this possible?
The answer lies in the list’s methodology, which focuses on transparency and rigorous reporting—on the company’s practices and behaviors, not its products. By these measures, Altria, as a company, scored very highly. A third party evaluator contracted by us, ISS Ethix, determined the rankings, guided by standards of publicly available records and detailed reporting, not by industry sector or end product.
Let’s take a step back.
The 100 Best Corporate Citizens List, in its 19th year of publication, force ranks the Russell 1000 companies (U.S.-based, publicly traded) on 260 ESG data points of disclosure and performance measures — all harvested from publicly available information in seven categories: environment, climate change, employee relations, human rights, governance, finance, and philanthropy & community support. There’s no fee to be included. Since the rankings are determined by a third party based on publicly available information, there’s no way to directly influence the rankings by external factors or values.
We do have a qualitative screen to catch companies that have had reputation concerns or behave as bad actors in the relevant calendar year. This past year we used the UN Global Compact as such a screen. Twelve wonderful companies got red or amber signals, flagging negative issues, and we published that information as well.
But Altria didn’t happen to get a warning flag in 2017—what gives? They weren't a party to any serious flagged issues in the calendar year of the ranking. If our flag included products that are associated with health concerns, most food, beverage, CPG, entertainment, transportation and product manufacturing companies would be caught.
The 100 Best Corporate Citizens methodology is designed to favor transparency and rigorous reporting. As it happens, companies in “problematic” fields -- from extractives (mining), to defense (weapons), to “vices” like tobacco and alcohol —tend to be very strong on ESG performance because they have long made the connection between rigorous reporting and risk assessment. More than other companies, they get it that sustainability reporting is a direct path to risk analysis and is therefore good and necessary for the bottom line. Companies in other industries could learn from them about their in-depth reporting.
But still . . . Does this approach pass the sniff test?
My friend and colleague Henk Campher, VP of marketing at Salesforce.org, complained on LinkedIn:
This is why #CSR sometimes still struggle to be taken seriously. Altria ranked number 6 while Disney is number 100. The core product of one will kill you while the other aims to make you feel happy. Kill you the most responsible way possible? And Levi’s and Starbucks and Timberland do not even rank... Seriously...I understand Henk’s point. But consider the alternative—a screen based on subjective reputations, values, and on the perceived benefits of end products. That raises other issues of concern and is also open to question. When the results come to us from the third party evaluator, I can’t, for better or worse, change the rankings to suit my personal preferences. Even though I know I have good opinions, the Jen list is probably less useful than one based on objective 260 data points.
Henk named some great companies in his callout. Levi Strauss is private and therefore was ineligible—no public financial records, no formal reporting process, so no way to evaluate. Timberland did qualify through its parent company VF Corporation (#67). Indeed, Starbucks didn’t make the top 100, despite its “good company” reputation. Starbucks does a brilliant job communicating sustainability messaging about its coffee origins and the political issues of our time, and it still outperformed more than 80% of the Russell 1000. But after 15 years of reporting as a multi-national, they do not use a widely accepted framework such as the Global Reporting Initiative to share information about their work on sustainability. It is likely they are missing some best practices in disclosure. A change in approach to more rigorous reporting would, most likely, improve their ranking over time.
I get what Henk’s saying, though. The 100 Best list doesn’t pass his “sniff” test of “great” companies. The companies in the 100 Best Corporate Citizens are public, most are legacy firms, and some have problematic histories they are looking to turn around. But these aren’t disqualifiers for our list.
There are lists that highlight companies that are sustainable to their core—from mission to product—like B Corps' Best for the World list, released this week. Of course, you have to be a certified B Corp to make that list which costs money and time, and which may not be realistically possible for many big public companies.
I don’t see any other way to force rank companies besides a rigorous measurement of publicly available information, based on disclosure. That’s what we have here at the 100 Best and we’ll be sticking with that process for years to come.
That doesn’t mean we’re not open to feedback. I appreciate the callout and the heated debate that has followed, because these conversations among sustainability professionals, honing our craft, are what really move the needle! This is just the second year that 3BL Media has owned the 100 Best Corporate Citizens list, and we are open to making tweaks to the model to make the list a stronger indicator of best corporate practices. The 3BL Association, which puts out the 100 Best list, will be convening a working group this fall to improve the methodology for the red and yellow card screens that accompany the list. We need your help to make our methodology stronger. Join us at the 3BL Forum in October, or better yet, join the association and have your say via our working group.
Jen Boynton is the former Editor-in-Chief of TriplePundit. She has an MBA in Sustainable Management from the Presidio Graduate School and has helped organizations including SAP, PwC and Fair Trade USA with their sustainability communications messaging. She is based in San Diego, California.
When she's not at work, she volunteers as a CASA (court appointed special advocate) for children in the foster care system. She enjoys losing fights with toddlers and eating toast scraps. She lives with her family in sunny San Diego.