CSRHub Blog Research on ESG metrics and comments on sustainability best practice

The Role of NGOs & Non-Profits in CSR

by Bahar Gidwani

This post is the latest in Crowds of Ratings, a Triple Pundit guest series about the CSR ratings field.

There are more than 1.5 million US organizations—and many more overseas—that have put addressing a  social issue or need above the goal of making money.  More than 2.3 million people work (again, the US figure) in these “not for profit” (NFP) organizations.  Hundreds of thousands more work for NGOs (non-governmental organizations) such as universities and hospitals.

These dedicated altruists help the poor and sick, lobby for legislation, protest, persuade, and discuss important social issues.  They also contribute a ton of useful information on corporate social responsibility (CSR).  NFP groups have the patience and enthusiasm necessary to track a company’s behavior over a long period of time, make lists of companies who do and do not support their cause, and mount public campaigns aimed at changing both consumer perception of a company’s brand and company management and employee awareness of how their company is behaving.

We have found these sources most useful for understanding specific, controversial issues (what we call “special issues”).  For instance, should companies test products on animals?  People for the Ethical Treatment of Animals (better known as PETA) feel they generally should not.  They maintain a list on their Web site of companies who do animal testing and encourage others to refer to this data.

A dedicated animal-loving researcher named Alex Poulos keeps his own list of “good” (no testing) and “bad” (testing) companies on a site called “Vida Compassion” or “Alex’s List.”  A third group called Understanding Animal Research offers a list of companies who have published statements on their internal policies and regulations on animal testing.  Their view is that when performed responsibly, animal testing contributes to safer products and better human health.

Another list comes from the American Anti-Vivisection Society (AAVS)—which now has set up a “Leaping  Bunny” certification program.  If you areinterested in the animal testing issue, you should probably explore the information on these sites and many others listed here. You can also cross check the data on each company these sites mention, using two of our SRI sources—Asset4 and IW Financial.

NFP sources give us information on things like mercury in fish (Oceana), involvement in Burma (The Burma Campaign and Global Union Burma), and a list of who is in the coal industry (Coal Mining Engineer’s List).  We’ve integrated many of these sources into our CSRHUB rating project—but we’d like to have more.  What holds us back?

1. Many NFPs do not target corporate behavior.  For instance, of the six current “Take Action” suggestions from the Natural Resources Defense Council (NRDC), only one involves company behavior.
2. Many NFPs believe they can most effectively change corporate behavior via private interactions.  Corporations sponsor a particular NFP program, adjust to a request from an NFP to change a policy, or respond directly to a letter or position.  For instance, The Nature Conservancy does not share its corporate discussions with outsiders like us.
3. Many NFPs do one-time studies.  For instance, Greenpeace did a wonderful study on the effects of cattle breeders on the Amazon. But, our system needs long-term, broad-based data—so that we can track over time and across many industries and countries.
4. By its nature, the data from NFPs is not independently reviewed and verified.  We tend to favor data that can be verified or confirmed.

Many NFPs have become justly famous for the quality of their CSR reporting.  For instance, Wood Turner’s ClimateCounts has been publishing corporate climate change Scorecards since 2007.  His small group of analysts assesses and publicizes the climate performance of more than 140 companies across 22 different areas.  We all benefit from this kind of selfless service to our community.

Bahar Gidwani is Cofounder and CEO of CSRHUB. He was the CEO of New York-based Index Stock Imagery, Inc, from 1991 through its sale in 2006. He has built and run large technology-based businesses, and has experience building a multi-million visitor Web site. Bahar holds a CFA, worked on Wall Street with Kidder, Peabody, and with McKinsey. Bahar has consulted to companies including Citibank, Banco Portuguese do Atlantico, Crane Co., Sperry, GE, General Dynamics, Computer Associates, Oracle, Microsoft, Computer Sciences, EDS, Cerner, and Acxiom. He has an MBA from Harvard Business School. Bahar is based in New York City.

CSRHUB is a corporate social responsibility ratings tool that allows managers, researchers, consultants, academics and individual activists to track the CSR performance of major companies. We aggregate data from more than 90 sources to provide our users with a comprehensive source of CSR information about 5000+ publicly traded companies in 62 countries. Browse our ratings at www.csrhub.com.