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How do you measure ethical performance?

January 5, 2008

It’s now a given that most multinationals are paying at least some attention to their ethical performance.

With the environment becoming such a big issue, the area of corporate responsibility is going to be under the microscope even more than in the past.

The problem is that there’s very little performance measurement and comparative auditing between companies.

There are surveys and polls, but it’s hard to find anything else that challenges and compares company standards.

It was therefore interesting to be send a press release from Covalence in Switzerland, who have been measuring and ranking companies on the their ethical performance for the past 3 years.

The company tracks performance by examining a variety of sources including the companies themselves, news media and non-profit organizations.

Covalence has just released its performance data for 2007 and there are some interesting findings.

The company provides three rankings.

1. Best Ethical Quote Score (positive minus negative news)

2. Best Ethical Progress

3. Best Reported Performance (How the company presents itself)

It’s interesting and something of a challenge for US companies to see the foreigners, Unilever, Toyota and HSBC leading the way, with HP, Alcoa and Starbucks trailing in their wake.

On a cynical note, the US companies do a rather good job at talking up their own performance with Wal-Mart and Coca-Cola emerging as the leaders in that category.

Covalence Ethical Corporate Rankings for 2007

Covalence also found that in 07, the environmental impact of production, eco product innovation and anti-corruption policy were the leading areas of ethical responsibility.

In addition to the annual report, Covalence provides real-time tracking
of ethical peformance.

Useful if you manage an ethical funds or work in
the CSR or PR department.

As I mentioned in an earlier post, audits and quality standards are going to emerge as an important issue for the environment and corporate ethics this and its good to see someone attempting to provide some comparative data.

Posted by Ed Cotton

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