Evaluating the CSR practices of America ’ s richest companies

Introduction The concept of corporate social responsibility (CSR) is one that has become popular over the last two decades or so. It is now expected that companies must take cognizant of the fact that making money is not enough in today’s world of business. They are now expected to consider the needs of other stakeholders, such as employees, the community and the environment in the business decisions. This is indeed a favorable development as it is unrealistic to believe as Friedman did, that the “business of business is business”. Companies do not operate in a vacuum. Their actions affect those around them, and these consequences must be taken into consideration by all companies. An important question that must be considered is how exactly are these companies supposed to discharge this important social responsibility? The authors, in a previous work, tried to provide a solution to this important question (Zubairu et.al. 2011). This attempt was achieved by examining the CSR reports of the top 3 most socially responsible companies in the world of 2010 as determined by Fortune Magazine. This examination led to the formulation of a CSR best practices guide which companies can use to gauge their CSR practices and find ways of improving these practices to attain a world-class standard. This best practices guide was targeted to address a company’s obligation to 4 key stakeholder groups: 1) Employees, 2) Community, 3) Customers, and 4) the Environment. In 2010, Fortune Magazine provided a top 500 list of America richest companies (Fortune 500, 2010). The top three were 1) Wal-Mart, 2) Exxon Mobil (replaced by 5 th placed, Bank of America due to inaccessibility of CSR report) and 3) Chevron. The objective of this paper was to evaluate the CSR practices of these three companies using the “CSR best practices guide” discussed above. There is no question that discharging social responsibilities costs money and who better to attain a world-class level of CSR than those companies who made the most money. The rest of the paper proceeds as follows: first, a literature review highlighting what has been attempted in the evaluation of company CSR activities is presented. This is followed by a research methodology section, and then a findings and discussion section. The paper concludes with a summary and conclusion section. Literature review: evaluation of CSR practices The review focused on the index or guide used by previous works to determine the level of CSR by companies through whatever media; be it annual reports, CSR/sustainability reports or company websites. The findings of the literature review are discussed below. In evaluating the CSR practices of companies, a large number of authors (Ruffin 2007, Wayhuni and Paramita 2008, Farneti and Guthrie 2008, Everaert et.al 2009, Sharma et.al 2009, Steurer and Konrad 2009 and Alden et.al 2010) relied upon the Global Reporting Initiatives’ Sustainability Reporting guidelines (G3 Reporting framework). “The G3 Reporting Framework published by the Global Reporting Initiative (GRI) is a system that was created to assist companies in the development of sustainability reports. The system includes six indicator protocols which function much like a rating system. The indicators categories are economics, the environment, labor, human rights, product responsibility and society. Within each