The Tomorrow’s Value Rating of the 15 largest Silicon Valley companies shows that they are developing some innovative corporate responsibility practices but appear to be falling below the standards stakeholders expect when it comes to day-to-day CR management.
In particular, companies are failing to mention many issues of concern to stakeholders. On those they do discuss, there is rarely any discussion of how – if at all – they have responded to these concerns.
The companies assessed in this Tomorrow’s Value Rating were the 15 largest information and communications technology companies in the San Francisco Bay area according to the Mercury News, which ranks these companies by sales.
1. There is an opportunity for a leader to emerge
Intel and HP achieved the highest scores, but there is an opportunity for any of the companies assessed to position itself as a clear leader in corporate sustainability in Silicon Valley. Of course, this requires serious investment – in communications and in operating effective management systems – as well as genuine commitment from top management.
2. Even early reporters can make an impact
Symantec has only recently started systematically reporting its corporate responsibility performance, yet it was ranked fourth. A really good report can go a long way towards improving a company’s sustainability.
3. Innovation is the strongest aspect
The companies assessed scored well in the Innovation domain of the Rating and display a range of leading-edge practices. For instance, they have begun participating in ICT industry initiatives such as the Electronic Industry Code of Conduct and the Global e-Sustainability Initiative. Some are also discussing how their products, services and initiatives tie into the broader goal of generating positive change in society. One notable example of innovation comes from Sun Microsystems, which has invested heavily in social media to create more interactive stakeholder engagement.
4. Day-to-day management practices are much weaker
The companies assessed perform, on average, relatively poorly on what can be described as the ‘nuts and bolts’ of managing and implementing corporate sustainability – such as stakeholder engagement, governance and management systems. This is an area in which the heavy industries such as oil and gas and mining have shown historic strength.
5. Sustainability in the value chain is managed better than might be expected
The scores for the Value Chain domain of the Rating are surprisingly high; normally, success in this area would not be achieved until the basic internal systems for managing corporate responsibility performance have been developed and are operating well. Apple is a case in point: It publishes a supplier report that describes a series of management systems for environmental performance, although nothing similar for its own operations.
6. Companies are overlooking issues of interest to stakeholders
Most large Silicon Valley companies are overlooking a wide range of topics of interest to stakeholders. Most of the overlooked issues tend to be socio-economic ones – for example, employee development, community investment, labor standards and workers rights, economic contributions and supplier development. By contrast, environmental issues are much better covered.
On the issues of concern that they do discuss in their reporting, most companies assessed are generally failing to respond to them – or at least to describe that response.
There is scope for rapid improvement in this area.
7. Governance structures are not adequately described
Scores for Silicon Valley companies are lowest in the Governance domain of the Rating. Encouragingly, this is generally the ‘lowest hanging fruit’ in terms of corporate sustainability performance. This is because governance structures are usually already in place, but they are just not being clearly described in company reports. Companies who performed badly in this area need to pay attention to disclosing policies and accountabilities.
8. Independent assurance is lacking
The ICT sector has been notoriously slow to seek independent assurance of CR and sustainability reporting. The companies assessed are, on the whole, no exception. Without independent assurance, winning stakeholder trust is difficult. Assurance can also be a powerful way of eliciting stakeholder views and feeding them into company decision making.