Rising To The Transparency Challenge

Transparency is a critical issue for corporate leaders, one that separates the compliers from the leaders in corporate responsibility reporting. It is a difficult aspect to measure, but Corporate Knights has tried to do just that with a new and improved release of its annual study, The Global 100 Most Sustainable Corporations in the World.

The Corporate Knights added a unique measure this year, called a Transparency Indicator. The number quantifies how easy it was to find information for the 10 other Key Performance Indicators (KPIs), therefore indicating the level of disclosure companies are practicing. As Corporate Knights' editor-in-chief Toby Heaps notes, "You need to have transparency if you want people to take you seriously. Then you can get beyond platitudes and discuss issues that people really care about."

But Corporate Knights is not the first to incorporate transparency. In 2009, CRO based its analysis of the 100 Best Corporate Citizens on data that was publicly disclosed, but Corporate Knights took it to the next level by creating a transparency metric that factored into the overall scoring.

What effect does transparency have on the final rankings? At #1, GE had a 73 percent transparency rank and at #2, PG&E had a 25 percent transparency rank. It's difficult to say without further analysis, but could decreasing the transparency gap have helped PG&E rise to the top? Fortunately, Corporate Knights walked its own talk by publishing complete data tables on its Web site for you to review.

 

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