Folks at Goodness500 have just launched the … Goodness 500 – a social responsibility ranking of US companies. The problem: measuring charity donations, executive diversity and toxicity produced/released does not really allow for much more than ranking companies by, well, charity donations, executive diversity and toxicity produced/released.
Take charity donations, for example. Spending money is the easy part. The fundamental point is one that we and others have made time and again: corporate responsibility is not about how money is spent, it is about how money is made. There are plenty of companies with big wallets, but poor environmental and social performance.
So, what about human rights policies, labour standards in the supply chain, greenhouse gas emissions, codes of conduct, occupational health and safety, anti-corruption policies, investment principles, water use, third-party verification, and so on? That’s where ESG performance is measured. And it’s also where true responsibility should be assessed (although there are plenty of views on the general validity or CSR rankings). Perspectives welcome.
(Just for the record: Kudos to the Goodness500 people for taking the initiative. Our concerns revolve around the methodology, not the intention.)