Tough times test firms' lofty standards

Enron isn't alone in treating employees unequally. The usual scenario involves soaring pay for executives while workers get pink slips, according to the Institute for Policy Studies and United for a Fair Economy. Last year, the two progressive groups published a report showing that chief executives who laid off 1,000 or more workers earned an average of 80 percent more than executives at other large firms.

Another barometer of corporate social responsibility - charitable giving - also looks stressed. True, corporate giving went up last year, but probably at a slower rate than in the past. In July, the Chronicle of Philanthropy released a survey suggesting a 4.1 percent rise, one-third the increase of a year earlier.

The terrorist attacks of Sept. 11 may complicate the picture, experts suggest, causing businesses to shift their giving toward disaster relief and away from traditional recipients.

Tougher to gauge is corporate commitment to the environment. Environmentalists have long contended that many companies' "green" initiatives amounted to nothing more than window dressing. Even optimistic observers have wondered whether more red on the bottom line would mean less green in corporate environmental budgets. In the early going, however, the economic effect looks muted.

"Maybe we don't know yet," says Allen White, vice president of the Tellus Institute in Boston and director of a United Nations-backed initiative to standardize corporate social and environmental reports around the world. "I think for these companies, this is the moment of truth."

Environmental initiatives most vulnerable to cutbacks are those requiring large amounts of manpower, he says. On the other hand, companies that have integrated the environment into their overall strategy look unlikely to change tack.

"It's not a commitment that they want to be seen stepping away from," says Doug Cogan, deputy director of social service for the Investor Responsibility Research Center in Washington.

Even Bethlehem Steel, which filed for protection from shareholders last October, has asked CERES to go through with its scheduled five-year review of the company's environmental efforts as a benchmark for the steelmaker when it emerges from bankruptcy.

Of course, major corporations are such sprawling organizations that they often present more than one face to the world.

Two years ago, Ford Motor Co. announced it would boost fuel mileage 25 percent in all its trucks by 2005. It plans to sell a new all-electric car this fall, a gasoline-electric hybrid sport-utility vehicle (SUV) in 2003, and a zero-pollution, fuel-cell Focus car in 2004.

On the other hand, the company has also killed plans to use hybrid power on its popular Explorer SUV, and now suggests it may need some wiggle room on its mileage pledge for 2005.

"The investments are still being made in these alternatively fueled vehicles, and I don't see any scaling back on that," says Mr. Cogan. But "it's dollars on the margin.... The reality is we're still putting out cars and SUVs that really aren't getting any better mileage than the fleet we had in 1985."

Ultimately, companies react to pressure from their customers and shareholders. And there, the social-responsibility movement looks as strong as ever.

Companies face some 100 social-issue shareholder resolutions this year with a heavy emphasis on global climate change and genetic engineering, says Ariane van Buren, director of energy and environmental programs at the Interfaith Center on Corporate Responsibility in New York. Although these resolutions don't succeed at shareholder meetings, they keep public pressure on companies to deal with the issue, she says.

That pressure - from consumers, shareholders, advocacy groups - shows no signs of abating, recession or no recession.

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