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October 11, 2001
Media Corporations Get Less than Rave Reviews
by Mark Thomsen
German research firm Oekom finds that the largest global media companies have room to improve their
social and environmental performance.
SocialFunds.com --
Media companies recently seem to be acting on a belief that size and reach increases
competitiveness and ensures survival in a tough global industry. Over the past three years,
Germany's Bertelsmann Group acquired Random House, French media conglomerate Vivendi Universal was
formed through the merger of Vivendi, Canal Plus, and Seagram, Viacom swallowed CBS and AOL merged
with Time Warner.
 Given their control over news and the flow of
information, the extent to which these companies are good corporate citizens should concern not
only social investors but society at large. Oekom, a social and environmental research firm based
in Munich, Germany, recently released a study in which it assessed 20 media companies in terms of
corporate social and environmental performance.
Under Oekom's Corporate
Responsibility-Rating (CRR) system, 50 percent of the evaluation is based on a company's social and
cultural performance and policies, and 50 percent is based on environmental performance and
policies.
The highest score a company can receive is A+, which according to Oekom
represents companies that "are especially progressive in the social/cultural as well as the
environmental realm." The lowest score is a D-, given to companies in which "hardly any noteworthy
social/cultural or environmental activities could be identified."
The highest overall
score in the study was B, which was only attained by the U.K.'s EMI Group. Two German companies,
Bertelsmann Group and Axel Springer Verlag, scored a B-. On the other end, nine companies received
a D+ rating or lower. At the bottom of the barrel was Clear Channel Communications (ticker: CCU),
which received a D-. Australia's News Corporation (NWS) was one of six media companies that had an
overall score of D.
Voluntary commitments to guaranteeing fair and objective reporting
become increasingly important when a smaller number of companies exercise greater control over
copyrights and media content. Oekom added this point as a criterion in its social and cultural
rating, and research for the report included information sources such as national press councils
and relevant non-governmental organizations.
The top scorer on this section of the study
was the British news agency Reuters (RTRSY), which received an A-. Close behind was Bertelsmann
Group, which scored a B+.
Negative scores were given where journalists risked sanctions
if they produced critical reports; this was the case with News Corporation. Rupert Murdoch's media
empire has already collected numerous fines from the courts because critical reports were
deliberately barred from publication, most recently about Monsanto, one of its advertising clients.
In that particular case, the company, fearing the loss of significant advertising revenue, censored
the article and sacked the two editors responsible.
The social and cultural rating also
assessed companies in terms of social and cultural management, staff relations, and external
relations. Bertelsmann received the highest overall social and cultural rating of B. Five
companies followed with a score of B-: Reuters, EMI Group, McGraw-Hill Companies (MHP), U.K.'s
Carlton Communications (CCTVY), and Vivendi Universal (V).
Media corporations generally
fared worse with regard to environmental ratings, it seems mostly because of inattention. Oekom
found that companies typically were not able to provide evidence of initiatives to protect the
environment or identify what actions were needed. While many media giants rightly stated that the
information and entertainment sectors tend to have fewer environmental impacts than other sectors,
these companies are nevertheless involved with paper production, printing, and the manufacture of
films, videos, CDs and DVDs. Media companies certainly have the potential to influence the
environmental performance of their suppliers.
Environmental ratings included environmental
management, products and services, and environmental reporting. Axel Springer Verlag came out on
top with an overall environmental rating of B+. The company was lauded for avoiding toxic inks,
reducing the amount of solvents used in the printing process, and using a high proportion of
recycled and oxygen-bleached paper.
Unfortunately, six companies scored a D and seven
scored a D-, revealing how much room there is for improvement. Companies that received a D-
include Canada's Thomson Corporation (TMS), Clear Channel Communications, and News Corporation.
©
SRI World Group, Inc. All Rights Reserved.
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