When it comes to deciding where to invest my money, where to open a bank account, or even where to buy a pair of socks, I'm influenced by a company's reputation. I notice which companies garner bad press and which ones are frequently praised.
The answers are never that black and white, though. Some believe that Wal-Mart (NYSE:WMT), for example, has room for improvement in how it treats employees, but it's also moving in a promising direction environmentally -- it's a big seller of compact fluorescent lightbulbs and offers organic foods.
I recently ran across a list of "Corporate Scrooges" of 2008 from the folks at Co-op America, newly renamed Green America. Here are a few:
- Citigroup (NYSE:C) former CEO Charles Prince was cited for his culpability in the devastation of the economy and his company, where tens of thousands of employees have been laid off. The company was also cited as a major financer of polluting energy plants.
- Dynegy (NYSE:DYN) CEO Bruce Williamson was singled out for planning to build more coal-fired, carbon-emitting energy plants, which would increase carbon dioxide emissions globally.
- General Motors (NYSE:GM) CEO Rick Wagoner was cited for "seeking a handout from the government while fighting its regulations."
Fair enough. But I think lists like these can be misleading. Let's face it -- this short list left many companies and CEOs out. In the financial arena alone, for example, there are many leaders who contributed to the economic meltdown. There are also lots of major polluters out there, and lots of companies fighting government regulations.
Saints
Meanwhile, the Chronicle of Philanthropy noted that in an economy that has been brutal to many retailers, a handful are actually increasing their donations to charity. According to the International Council of Shopping Centers, sales numbers in November were the worst in more than 35 years. Sales were off 13% from year-ago levels. So in such a setting, who's giving more? Four companies that plan to do so are Target (NYSE:TGT), Wal-Mart, Home Depot (NYSE:HD), and Costco (NASDAQ:COST). I applaud them for doing the right thing by investing in their communities. But let's also admit that they're doing the smart thing, because consumers appreciate companies that give.
So pay attention to Scrooges and princes, but recognize that many companies are a blend of the two.
The big picture
If you're really serious about ferreting out the most generous companies, you should do some number-crunching. Take Wal-Mart, for example. It gave a total of $338 million to organizations in the 50 states in 2007. During that year, it also raked in $12.7 billion in net income. So it gave 2.7% of its net income away. Target, meanwhile, has been giving away 5% of its net income to charity since 1942.
That might make you feel that Target is the better citizen, but not everyone agrees. At the corpwatch.org site, for example, an article pointed to apparent similarities between Target and Wal-Mart on issues such as labor practices at their stores and suppliers.
My personal bottom line is that while I pay attention to good and bad press that companies receive, I recognize that the situation is rarely as simple as it appears. I applaud companies for doing good, though, and I hope to see them do more.
