The bar for corporate citizenship has been raised. It’s time for the rankings to catch up.

The promise of stakeholder capitalism — that companies serve the interests of customers, employees, suppliers and communities in addition to shareholders — is being pressure-tested in real time. Social unrest, an unfolding pandemic, historic unemployment and the slower moving but no less devastating climate crisis have only intensified the scrutiny companies were already facing from investors and others on environmental, social and governance (ESG) issues.

There are numerous rankings and ratings that evaluate companies’ ESG performance and identify leaders and laggards. One annual ranking released this week, 3BL Media’s 100 Best Corporate Citizens list, “evaluates the largest public U.S. companies on ESG transparency and performance, based on an independent assessment by ISS-ESG.” The 100 Best Corporate Citizens list covers eight pillars: climate change, employee relations, environment, ESG performance, financial, governance, human rights and stakeholders and society.

Victoria Mills, Managing Director, EDF+Business

Yet despite this broad scope, the 100 Best Corporate Citizens list falls short in measuring a critical aspect of corporate citizenship: public policy advocacy.

Because the policies a company supports or opposes have far greater impact than its individual actions, a comprehensive assessment of corporate citizenship must include how a company uses its political influence, whether through direct lobbying, trade associations or financial contributions. These three levers are embodied in the AAA Framework (Advocate, Align and Allocate) endorsed by EDF and other leading environmental groups.

The 100 Best Corporate Citizens list scores companies on only one of the three As (Allocate): that is, the use of company funds for political purposes. However, the score is based on transparency (what information is disclosed) not performance (how the money is used).

This would not be a problem if the list were called “The 100 Most Transparent Companies,” but as a measure of corporate citizenship, disclosure alone is woefully inadequate. In fairness, the 100 Best Corporate Citizens list is not the only sustainability ranking with limitations. As noted in EDF’s Blind Spot report, most don’t address public policy advocacy at all.

Consider the climate crisis, where our collective thinking urgently needs to shift from what can we do to what will it take to solve the problem. The 100 Best Corporate Citizens list gives companies points for setting science-based targets to reduce their own emissions, which is important. But only public policy can reduce emissions at the speed and scale science says is necessary to limit the worst impacts of climate change.

That’s why the current standard for leadership is not just having a goal of net-zero emissions by 2050, but also advocating for policies that will achieve that goal across the entire economy. Companies on the 100 Best Corporate Citizens list that have done both include Adobe, Microsoft and PepsiCo.

Finally, no company that opposes policies that safeguard the climate or public health should be on a list of 100 Best Corporate Citizens. Yet General Motors — which joined the Trump administration’s attack on the Clean Car Standards — ranks eighth on this year’s list, above Ford (#41), which is supporting the standards and investing in innovation rather than litigation.

No matter how well GM might score in other categories, its support for a rollback that will add more dangerous pollution to our air, making Americans sicker and causing thousands of premature deaths should be disqualifying. Inexplicably, Toyota, which joined GM in attacking the Clean Car standards, appears on the Corporate Knights Global 100 list of “the world’s most sustainable companies.”

This is also an equity issue: at a time when communities of color face disproportionate impacts from COVID-19, businesses must be judged by how strongly they support and defend policies that protect public health. Regrettably, some industry associations are doing the opposite, lobbying for relaxation of environmental rules at a time when protecting air quality is literally a matter of life and death.

Given the challenges facing society today, environmental groups, investors, employees and consumers are holding corporations to a higher standard. In 2020, climate leadership requires policy leadership. It’s time for those who keep score — rankings, ESG ratings and reporting frameworks — to catch up.