Listing, Naming, and Shaming


Listing, Naming, and Shaming

Another effective tactic used by these pressure groups and NGOs that has been particularly attractive to the media is to develop rankings for companies in various ratings and benchmarks. These Best and Worst Lists can be influential and sometimes damaging to companies. The Multinational Monitor s Ten Worst Corporations is a good example, as is Corpwatch s Greenwash Awards for worst corporate environmental practices (cosponsored with Greenpeace). Calpers (The California Public Employees Retirement System) publishes each year its influential annual focus list of companies that it cites as the worst examples of corporate and financial governance. It is a chief executive s worst nightmare to find that his or her company has been named and shamed on one of these types of lists.

Less showy, but effective nonetheless, online research facilities and archives also now provide activists and investors with a wealth of information concerning company behavior. In the United Kingdom, for example, Business in the Community sponsors the Corporate Responsibility Index, which now includes 122 companies, including half of the FTSE100, and provides benchmarks for measuring how these companies affect their workplace, community, and environment. Business in the Environment s Index of Corporate Environmental Engagement provides similar benchmarks, comparing companies against each other on the basis of their environmental performance and management approach. Similarly, AccountAbility International, the organization responsible for devising the AA 1000 process standards, has developed a Web-based initiative known as Gradient, which rates and then ranks companies on their supply chain labor and environmental standards. As with many of these emerging comparative indices, the concept behind the Gradient Index is that relevant industry data on supply chain leading practices needs to be established so that all companies within that industry can be compared. Gradient s central insight, says John Sabapathy, Program Manager at AccountAbility, is that companies integration of labor issues into key business functions (e.g., risk management, buying, quality assurance, stock management) significantly informs their capability to deliver against supply chain labor standards. [19 ]

Importantly, the index is not confined only to large organizations whose brand name is well known, but extends monitoring to smaller or less well-known stealth companies (in the words of John Elkington of AccountAbility), that in the past have been able to avoid being held to more stringent standards of behavior. The Gradient Index applies supply chain management standards to vertical industry sectors in a way that allows for a comparison between company practices (see a fuller explanation of Gradient s criteria in Chapter Ten).

The rise in both effectiveness and public acceptance of these and other NGO tactics has been one of the least appreciated, but most important, realignments that have occurred in the global community in the past decade . As we have seen, NGOs now find strong support among the investing and the buying public, at a level that would have been unthinkable 10 years ago and should be the envy of any corporation. In short, NGOs are no longer a fringe movement in the global economy.

Few business leaders , on the other hand, have really come to appreciate the powerful and often legitimate role that these activists play in helping to shape and regulate global business behavior. Most companies interviewed (and American-based executives in particular) still see NGOs as adversaries, to be avoided whenever possible, and to be crushed when necessary. Corporate executives still too often dismiss NGO complaints, assuming that obfuscation and legal delays will allow the company to outlast any pressure group campaign.

If that was the case a decade ago, it is a very risky policy today. After all, though legal cases represent a significant tool for NGOs, simply naming and shaming companies through the media constitutes a formidable strategy in itself. And a damaged reputation is much less easily rebutted by either the corporate public relations or legal departments than it was in the past.

In reality, all parties would benefit from greater cooperation between companies and NGOs, but mutual acrimony continues. A recent survey involving 133 NGOs found that in order to win over NGO support, corporations urgently needed to reassess their global responsibilities, and to exercise moral leadership in the global markets where they were now active. The survey found that 62 percent of NGOs believed that corporations were not concerned with ethical conduct (which, interestingly, was a somewhat lower figure than in a recent Harris Interactive survey that found that 73 percent of Americans rated corporate America as below average when it came to corporate citizenship). [20 ] Forty-one percent of NGOs thought their present relationship with corporations was antagonistic, and nearly half said they had no relationship at all with key companies. And this is despite the fact that nearly 80 percent of European and American opinion leaders claim to want NGOs and corporations to partner on tough issues. [21 ] It is an unproductive, if not destructive, mindset, and business leaders would do well to begin to appreciate both the authority and legitimacy of these NGOs in the modern global economy.

[19 ] Moving Up the Learning Curve ” Corporate Management of Supply Chain Labour Standards, Sustainability at www.sustainability.com/news/articles/ core -team-andnetwork/John-Sabapathy-gradient-index-mar-02.asp.

[20 ] Jay Culbert, A Guide to Contemporary Sources of Information on Corporate Social Responsibility, Washington Council on International Trade, July 2000, p. 12.

[21 ] U.S. Attitudes on CSR Move Closer to Europe s, Holmes Report, April 25, 2002, p. 2, at www.holmesreport.com.