Tech Sector Takes a Kicking in Ethics Ranking

Quite honestly it is hard to take too, too seriously sustainability ratings such as the CRO 100 Best Corporate Citizens of 2008 but they are kind of fun to pull apart none the less. Predictably these rankings generate a fair degree of false humility from the ascendant and gnashing and wailing from the descendant. Says the CRO's Dennis Schaal:

This list—CRO’s 100 Best Corporate Citizens 2008—matters. If you think for a minute that it doesn’t, then get on the phone or sit upright at your computer to listen to or read some of the phone calls and e-mails CRO magazine received from irate companies that found themselves MIA from the list or lower in the rankings than they would have liked.

Oh the humanity!

Emotions are bound to be running particularly high this year with a seemingly unstable methodology generating a staggeringly wild rate of churn of 79% and the tech sector has taken a real drubbing as a result. Microsoft, Google, AMD, Autodesk, Salesforce.com, Dell and Adobe amongst others all find themselves thrown out of the CRO virtuous 100. But Intel, IBM, Sun and Cisco endure the shakeup with Intel coming in at number one.

Maine based IW Financial presided over the analysis for the CRO list. In 2008, CRO—in partnership with IW Financial, a Portland, Maine, research and consulting firm that did much of the heavy lifting—tweaked the methodology to emphasize the corporate responsibility efforts of large, impactful corporations in eight categories: Climate Change, Employee Relations, Environment, Financial, Governance, Human Rights, Lobbying and Philanthropy. In so doing, we added, renamed, combined or dropped other categories, and gave Climate Change and other issues related to Environment the greatest weight because of their acute importance.

Sadly the CRO listing only evaluates US headquartered firms so we are getting a rather US centric view on the global corporate sustainability agenda. This is unfortunate because certainly both the markets and the issues at hand are truly global so why not the ranking?

What I find a little confusing about all of this is CRO / IW Financial only in December published a top 10 by industry list for US headquartered firms and for the software industry this included Adobe (#1), Oracle (#2) & Microsoft (#9) and yet none of these firms feature in the CRO Top 100 just published. Still, I think Intel's top ranking is well deserved - do check out the Intel CSR blog here to learn more about what they do well.

I think CRO just maybe on to something here and certainly a shift in the methodology to weigh more heavily towards climate change, policy and performance is a good thing. But to get a more meaningful result CRO / IW Financial also need to consider product and relative operational impact in the equation. And yet for 2008 they have actually dropped the product dimension which was previously factored in. Maybe this explains why the 2008 top 100 ranking contains no less than 18 Utilities and yet not one software company whilst in 2007 we practically had the inverse. That is not to say the Utilities have not performed brilliantly, PG&E for example is doing some really great things on sustainability. But if we are to use these ratings to stimulate a discussion on actual sustainability performance then we need to focus a little more on the core business model and the materiality of sustainability risk & opportunity unique to each sector.

OK, so no ranking is perfect, and the CRO is evolving the methodology and admittedly I do love to nit pick these things. But perhaps the most important purpose such beauty contests serve is to get us all talking and hopefully thinking a little as well. For that, thank you CRO.