The Business Ethics Blog

The Globe & Mail’s Report on Business magazine just published its latest Corporate Social Responsibility Ranking, in collaboration with Jantzi Research, Inc. The focus is on Canadian companies (or Canadian branches of international companies), and companies in just 5 sectors (Big Retail, Shoes & Clothes, Fast Food, Food Production, and Food & Drug.)

Companies are evaluated and scored in six key areas: community and society, corporate governance, impact on customers, treatment of employees, the environment and human rights. Jantzi translates the combined scores into a letter grade that is meant to convey the overall impact of a company’s social and environmental practices on employees, consumers, investors and communities, as well as the company’s success in tackling ongoing CSR issues. The scoring criteria are weighted differently for each sector, but the letter grades give some indication of a company’s performance relative to those in other sectors. Companies in the same sector with the same letter grade are ranked by their underlying numeric score.

A number of organizations and publications produce such rankings. Methods of evaluation vary, as does depth of research and degree of diligence.
A few things worth noting about this particular ranking:

• Apparently, just a single company (adidas-Salomon) earned a score in the A range. The calibration of such scares is of course somewhat arbitrary: to set the scale so that even industry leaders don’t get an A+ may well be a reasonable choice, but we should at least note that it is a choice.
• Having a policy on a particular issue is not enough. A number of companies got slammed for having good policies, but bad practices. For example: “Wal-Mart has a strong charitable donations program and is top-ranked for its workforce diversity policies. But it rates poorly on diversity performance and currently faces a U.S. class-action lawsuit filed by 1.6 million women alleging wage discrimination.”
• Lack of transparency is nearly fatal as far as these rankings go. A company might have great policies & practices, but if they’re unwilling to talk about them, their score sinks into the basement. The Forzani Group, for example, earn a grade of “E” (the second lowest possible), because the company does “not report any policies or programs that address the treatment of customers, suppliers or the environment.” [emphasis added]
• This isn’t very scientific, but there seems to be a correlation between high scores and a history of bad publicity. It seems likely that Starbucks, Nike, and the Gap score very well these days because they’ve cleaned up their act in response to pressure from the public, the press, and NGO’s.
• A number of firms get credit for impressive rates of charitable donation. But no information is given, here, about the beneficiaries of this corporate largesse. Not all charities are equally socially worthy. There would be differences of opinion, to say the least, about the value of donations given to: the National Rifle Association, PETA, or various pro-life or pro-choice groups.