Fourteen of the world’s 100 largest businesses have scored less than
ten out of 100 in the second annual AccountAbility Rating of their
social and environmental performance.
The companies, which are mainly based in the US and include Costco,
Time Warner and Wal-Mart, fell significantly short of the average of 32
and well behind the highest-ranked company, BP, which registered 78.
The rating, devised by the UK-based Institute of Social and Ethical
Accountability (also known as AccountAbility) and the csrnetwork
consultancy, assesses the 100 companies with the highest gross revenues
in six key areas: stakeholder engagement, strategy, governance,
performance management, public disclosure and assurance.
All the worst-ranked companies in 2005 occupied similar lowly positions
when the rating was calculated for the first time last year (EP6, issue
3, p5).
Isea chief executive Simon Zadek said the ‘disturbingly low’ figures
suggested many are still not seriously considering non-financial
matters. ‘The gap between the leaders and laggards raises important
questions about the latter’s ability to manage underlying risks and
exploit emerging opportunities,’ he said.
Mark Line, csrnetwork’s director, said another reason for the low
scores was that ‘most other indices look only at the companies that
have volunteered to be scrutinized and therefore expect or hope to do
well’.
Despite poor performances, the rating overall shows an improvement. The
average score has risen eight points since last year and a third
achieved AccountAbility’s ‘pass mark’ of 40, (one in ten last year).
Immediately behind BP, which topped the list for the second year
running, were Shell, Vodafone, HSBC Holdings and Carrefour. The most
improved was HSBC Holdings, up from 45th to fourth thanks in part to
its creation of a board committee on corporate responsibility and
commitment to apply the Equator Principles.
European companies continue to lead the field, with an average score of
40 and seven of the top ten best performers. US businesses had an
average of 24, better than last year’s rating of 16 but trailing Asian
competitors, which averaged 28.
US companies generally scored poorly on stakeholder engagement,
non-financial reporting and third-party assurance, and were far less
likely than their European counterparts to observe recognized labour
and human rights standards.
