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Posted 12/2/2004



Forbes


 
Forbes
Who are our best corporate citizens?

Forbes ranks the biggies on their commitments to environment, diversity, community and human rights. The best: techs. The worst: oil companies and Wal-Mart.

By Forbes

It's a debate as old as the corporate institution: Are companies beholden only to their shareholders, or do they have a responsibility to society beyond their bottom line?

In 1970, future Nobel economist Milton Friedman published a now-famous essay asserting that the best corporate citizens were those who maximized their profits within the legal boundaries set by society. If there was good to be done with those profits, shareholders should do it. They could send their dividends to charity.

Friedman's view provokes plenty of dissent in the executive suite.

Many a corporation makes quite a show of serving other "stakeholders" besides the owners of shares -- employees, communities or environmental causes, for example. In the last of our four-part Beyond the Balance Sheet series, we review one consultant's scorecard on how big corporations act as citizens. KLD Research & Analytics, an investment research firm in Boston, does the ratings to help institutional investors and money managers who want to steer money toward good corporate citizens, on the theory that Friedman is wrong and that such angels can be identified.
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The ratings
Our ratings cover four broad categories: community, diversity, human rights and the environment. Intel (INTC, news, msgs) scores high, in large part for putting money into science and technology education for high school and college students, and for adults.


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"We need a highly educated work force to make our products and a tech-savvy consumer base to buy them. So for us this is not just the right thing to do, it's the smart thing to do," Intel Chief Craig Barrett said in a prepared statement.

KLD, whose database contains an analysis of 3,000 companies, combines quantitative and subjective measures of citizenship. In the former category it looks at such measures as charitable donations as a percent of pretax earnings and the percentage of subcontracting with women- or minority-owned businesses. The subjective measures include such matters as whether a company has an innovative hiring program for the disabled.

 Grading the top corporate citizens
CompanyDiversityCommunityHuman RightsEnvironment
3M (MMM, news, msgs)ABCBGave 68% of total charitable contributions toward education programs in 2003.
Abbott Laboratories (ABT, news, msgs)BBCCDonates its rheumatoid-arthritis drug (Humira) to uninsured elderly people.
American International Group (AIG, news, msgs)DCCCSponsors a $400 million fund dedicated to financing infrastructure in Africa.
Altria Group (MO, news, msgs) BBCCProvided $89 million in cash and in-kind donations to anti-hunger organizations worldwide.
American Express (AXP, news, msgs)BCCCGave $14 million over seven years in charitable donations to arts and cultural-related projects.
Amgen (AMGN, news, msgs)BBCCSpent $1.5 million to encourage African-American women at Spelman College to pursue biotechnology.
Bank of America (BAC, news, msgs)ACCAPledged $750 million in 2004 (over 10 years) to affordable housing programs.
BellSouth (BLS, news, msgs)CBCCSupports schooling initiatives for Latin American working children.
Bristol-Myers Squibb (BMY, news, msgs)AACBDonates vitamins to the Dominican Republic and disease management services to Brazil and Haiti.
ChevronTexaco (CVX, news, msgs)BCFFStarted a $5 million, five-year community development program in Nigeria.
Cisco Systems (CSCO, news, msgs)BBCCInvested $120 million worldwide (as of 2003) in its networking training program.
Citigroup (C, news, msgs) CCDCHas given $4.4 million for welfare-to-work organizations from 1999 through March 2003.
Coca-Cola Enterprises (CCE, news, msgs)CAFBHas built 55 schools in the Philippines over past seven years.
Comcast (CMCSA, news, msgs)CCCCCreated a K-12 Web site featuring 500 of the most effective education sites online.
ConocoPhillips (COP, news, msgs)CDDFDonated combined $31 million (partnered with BP) over two-year period toward education and charities in Alaska.
Dell (DELL, news, msgs)BCCCSubcontracted $278 million for goods and services with women- and minority-owned suppliers.
eBay (EBAY, news, msgs)BCCCHas raised $6 million (as of 2001) through charity auctions on its own site for non-profits.
Eli Lilly (LLY, news, msgs) BBCCDonating $2 million over four years for U.S. government to train foreign scientists who study infectious diseases.
Exxon Mobil (XOM, news, msgs)DCDFHas contributed $9.5 million to elementary and secondary school programs over five years.
Genentech (DNA, news, msgs)BBCCProvided $41 million worth of drugs to uninsured patients last year.
General Electric (GE, news, msgs)ADDCCreated $30 million College Bound program to increase college attendance by inner-city students.
Hewlett-Packard (HPQ, news, msgs)AACARecycles millions of pounds of used equipment each year.
Home Depot (HD, news, msgs)DCCAHas built 152 playgrounds over eight years through partnership with KaBOOM!.
IBM (IBM, news, msgs)ACCBCreated five-year, $35 million campaign to reform 10 schools by introducing updated technology and software.
Intel (INTC, news, msgs)BACADonated $58 million toward education initiatives in 2003.
Johnson & Johnson (JNJ, news, msgs)BBCBPurchasing 10% of electricity from renewable sources via the EPA's Green Power Promotion program.
JPMorgan Chase (JPM, news, msgs)BBDCAllocated $500 billion over seven years for mortgage lending for low-income minorities and new immigrants.
Medtronic (MDT, news, msgs)BCCCLaunched a five-year, $12.5 million campaign to grant money to medical institutions.
Merck (MRK, news, msgs)BACDCommitted $800,000 to a training facility in Kenya to increase vaccines for children.
Merrill Lynch (MER, news, msgs)CCDCTeaches youth to become entrepreneurs and small-business owners.
Microsoft (MSFT, news, msgs)ACCCHas spent over $125 million since 1997 increasing its diversity recruitment efforts.
Morgan Stanley (MWD, news, msgs)DCDCDonates one dollar for each hour employees volunteer time toward Communities in Schools program.
Oracle (ORCL, news, msgs)BBCCAnnounced a $1.4 million grant in 2003 to the Boys and Girls Club in San Francisco.
PepsiCo (PEP, news, msgs) BCCCDonated $1.2 million to assist owners of delis, bodegas and newsstands in New York.
Pfizer (PFE, news, msgs)ACDCCommitted $3 million over three years to HIV prevention in nine southern U.S. states.
Procter & Gamble (PG, news, msgs)ACCBEmploys diverse management staff with 18% minorities and 35% women as of June 2003.
Qualcomm (QCOM, news, msgs)BCCCHolds Job Shadow days in which students shadow an employee to gain real work experience.
SBC Communications (SBC, news, msgs)ABCCReceived awards for support of disabled veterans and for career development programs for the disabled.
Time Warner (TWX, news, msgs)BCDCLaunched online Amber Alerts to broadcast information on abducted children to AOL users.
Tyco International (TYC, news, msgs)CCCDMatches employee donations to the United Way dollar for dollar.
United Parcel Service (UPS, news, msgs)CBCCAdded "alternative fuel" vehicles -- including hybrids and fuel cells -- to delivery fleet.
U.S. Bancorp (USB, news, msgs)DBCCContributed $20 million to charities in 2003 -- 64% higher than the industry average of $12 million.
Verizon Communications (VZ, news, msgs)CCCCDonated $3 million and 10,000 cell phones as of 2003 to aid victims of domestic abuse.
Viacom (VIA.B, news, msgs)BCCCHas provided $25 million worth of musical instruments to public schools since 1997.
Wachovia (WB, news, msgs)BBCCGave $25 million to youth organizations over three years.
Wal-Mart Stores (WMT, news, msgs)FBFCGave $153 million in charitable giving versus the industry average of $11 million.
Walt Disney (DIS, news, msgs) BCDBDonated $5 million worth of toys, books, games and TVs to 300 children's hospitals this year.
Wells Fargo (WFC, news, msgs)ADACEstablished a $10 billion loan fund for women entrepreneurs.
Wyeth Pharmaceuticals (WYE, news, msgs)CCCDHas pledged $2 million to the Global Polio Eradication Initiative in Africa.
Yahoo! (YHOO, news, msgs)BCCCOffers free online advertising and online media exposure for charitable organizations.


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