Britain launches new index of corporate virtue
Date: 13-Mar-03
Country: UK
The inaugural Corporate Responsibility Index, published by a business charity and backed by the government, ranks more than 100 companies on the basis of their performance in dealing with community, environmental, workplace and other social issues.
Top-ranked firms include Britain's biggest clothing retailer, Marks & Spencer Group Plc (MKS.L), mining company Rio Tinto (RIO.L) (RIO.AX), consumer goods group Unilever (UNc.AS) (ULVR.L), and three of Britain's biggest grocers, Tesco Plc (TSCO.L), J. Sainsbury (SBRY.L) and Safeway Plc (SFW.L).
The lower rungs feature media baron Rupert Murdoch's British Sky Broadcasting (BSY.L), advertising giant WPP Group Plc (WPP.L) and the world's largest provider of news and data to financial markets, Reuters Group Plc (RTR.L).
Business in the Community (BiC), a 20-year-old charity made up of 700 firms, stressed that all the companies were winners to the extent that all had volunteered to be part of the index and to have their performance judged publicly against their peers.
Of the London stock market's 100 biggest blue chips, only 53 took part in the exercise, which asked firms questions about their policies and record in such areas as health and safety, global warming, staff diversity and community investment.
"Everyone who takes part in such a public exercise should be congratulated," said Caroline Cook, BiC's senior index manager.
But she said companies found they needed to look harder at the way they dealt with these issues as they come increasingly under the microscope of both the public and investors.
"A number of companies have said that they are using this now as a defacto index to measure their performance," she said.
Companies worldwide are under intense scrutiny to polish their image on a range of fronts after a series of accounting scandals, executive pay-offs and general corporate excess.
But some firms, including Reuters, criticise the methodology used to compile the new Corporate Responsibility Index.
Reuters said the index compilers had disregarded its global commitment to training journalists from countries without a tradition of free speech: its charitable arm had trained over 3,000 journalists from 87 countries over the past three years.
"It's appropriate for an organisation like Reuters to show its sense of global community by supporting journalism training and other media-related activity, particularly in countries without a tradition of press freedom," said Reuters spokesman Simon Walker.
"It's meaningless for Business in the Community to disregard these measures and to assess us instead on issues like solid-waste disposal and global warming," Walker said.