Who's socially responsible?
About one in every ten dollars of assets under management in the U.S. - an estimated $2.3 trillion out of $24 trillion - is being invested in companies that rate highly on some measure of social responsibility. That's a $2.3 trillion wager that socially responsible companies will outperform companies that don't engage a wide array of stakeholders, from shareholders and customers to employees and activists, in an ongoing conversation about what can be done better.
Which is why Fortune, for the second year in a row, is ranking the world's largest companies according to how well they conform to socially responsible business practices. See the top 11 here.
The survey, conducted by AccountAbility (a London think tank on corporate accountability) and CSRnetwork (a British for-profit consultancy), measures six criteria, ranging from stakeholder engagement to performance management, at the top 50 companies on Fortune's Global 500 list.
Many of the highest-ranking companies are not what you'd think of as do-gooders. Oil giants BP and Shell are No. 2 and No. 3, respectively, and four of the top ten on the list are utilities. That's because the rankings don't measure performance outcomes such as CO2 emissions. Instead, they look at management practices: Does a company have procedures for listening to critics? Are its executives and board members accountable? Has it hired an external verifier?
What do you think of the companies on this year's list? Who would you pick? Are there better ways to judge companies?
I have a problem with these rankings, as well as the criteria used. How can BP be ranked so high? I recently wrote an article about the company's shortcomings, so I'm not sure how they fall under the category of socially responsible.
Latakia's Socially Responsible Business
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