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Top 100 'poor' on social impact

A new report by a pro-business consultancy reveals corporate responsibility is sorely lacking among the world's top 100 firms, especially in the US.
Financial Times, June 23, 2004

London, UK -- The world's 100 largest companies have a poor record of accounting for their impact on society and the environment, according to a report published today. They score an average of just 24 out of 100 on a range of measures including strategy, governance and stakeholder involvement, according to a global ranking by AccountAbility, an international institute for social and ethical accounting, and CSRnetwork, a corporate responsibility consultancy.

Only five companies, led by BP, score more than 50 per cent, and only one US company, Hewlett-Packard, features among the 10 highest scorers. The Accountability Rating report is published to coincide with what the United Nations is billing as the largest gathering of chief executives, government officials and leaders of civil society to discuss global corporate responsibility.

Mark Line, director of CSRnetwork, said the purpose of the survey was to identify companies "that have really integrated responsible business practices into their core processes - a prime facet of accountability". It examined the published reports of the Fortune Global 100 companies, the biggest by gross revenue. The low average score "highlights how much still has to be done before an approach to accountability aligned to long-term value creation and sustainable development moves beyond 'nice-to-do'," said the report.

The other measures it used were performance management, public disclosure and assurance - or independent verification. However, the difficulty of judging internal behaviour from a company's public reporting is highlighted by Royal Dutch/Shell's appearance among the five best-scoring companies, despite the crisis over its reserves, governance systems and revelations about activities in Nigeria.

The authors said they would evaluate and tighten their criteria for measuring accountability. "Shell's high performance in the rating may appear surprising given recent revelations," they said. "However, its reporting provides evidence of many of the key features the rating is looking for." These included clearly stated social and environmental strategies, policies aligned to sustainable development, and board-level accountability.

US companies featured heavily among those scoring less than 10 per cent in the rating, including Berkshire Hathaway, Boeing, Freddie Mac and WalMart.

European companies scored 31 per cent on average, Asian companies 25 per cent and North American companies 16 per cent. "The relatively low performance of US companies reflects in part their focus on philanthropy and community involvement, which count for little in the Accountability Rating as they are generally not strongly linked to core business strategy," the report said.

ABOUT CSRnetwork:
We are a strategic consultancy on all aspects of corporate social responsibility, offering specific services in five areas: Benchmarking, Strategy and Systems, Stakeholder Engagement, Communications, and Assurance. Client List (partial) -- Adidas-Salomon, Bechtel, BP, DHL, First Group, Halfords, International Finance Corp, Musgraves, Procter & Gamble, Toyota Motor N. America (TMNA), USS

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