Engine builder tops ethics survey
 |  A Cummins-powered hybrid bus enters service in Indianapolis. The company is committed to reducing carbon emissions. |
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| | TOP 10 U.S. CORPORATE CITIZENS OF 2005 | 1 Cummins
2 Green Mountain Coffee Roasters
3 St. Paul Travelers Companies
4 Nuveen Investments
5 Intel
6 Wells Fargo
7 Hewlett-Packard
8 Procter & Gamble
9 Novell
10 Xerox
Source: Business Ethics Magazine
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(CNN) -- Engine manufacturer Cummins has been named the top "corporate citizen" in the U.S. in the latest survey by Business Ethics magazine.
The Indiana-based company was cited for its commitment to emissions-reduction, its corporate social responsibility efforts and its improved financial performance.
Business Ethics' "100 Best Corporate Citizens," published in the magazine's spring 2005 edition, lists the leading ethical performers on the Russell 1000 Index of the 1,000 largest public-listed companies in the U.S.
Cummins is followed by Vermont coffee company Green Mountain Coffee Roasters, hailed as "a pioneer in helping struggling coffee growers by paying them fair trade prices," and insurer St. Paul Travelers Companies, cited for its community service.
Cummins is one of 19 companies to be named every year since the inaugural list in 2000. Others in the top 10 to share that distinction are St. Paul Travelers, Intel (5), Hewlett-Packard (7) and Procter & Gamble (8).
Last year's No. 1, government-chartered home mortgage lender Fannie Mae, was removed from the 2005 list due to investigations surrounding accounting irregularities which forced Franklin Raines to step down as CEO in December.
But business technology company Xerox returned to the list at No. 10 following its disqualification last year after the Securities and Exchange Commission fined it over accounting irregularities.
The company set up an ethics hotline in response to the scandal, and has been praised for its treatment of female employees, who make up a third of both overall workforce and management.
Sports manufacturer Nike also made its first appearance on the list, ranked at No. 33. On Tuesday, the Oregan-based company, which has been dogged by allegations of sweatshop conditions in its overseas operations, disclosed a list of more than 700 contracted factories in its latest corporate responsibility report. (Full Story)
"What distinguishes the 100 Best Corporate Citizens from their peers is a commitment to higher standards," said Business Ethics editor Marjorie Kelly.
"Those that perform to a higher standard in serving a variety of stakeholders with excellence and integrity."
The list is based on 2003 social and economic performance data, with companies scored in eight different categories: total return to stockholders, community, governance, diversity, employees, environment, human rights, product.
Governance was rated for the first time this year, with companies scored negatively for accounting restatements or excessive CEO pay, and scored positively for paying CEOs less than $500, 000 per year.
Cummins has spent more than half its in-house research and development budget on emissions-reduction technologies over the past 10 years. Chairman and CEO Tim Solso said he believed the company could be at close to zero emissions within another decade.
Yet the company's environmental thinking has also placed it in an ideal position to capitalize when more stringent emission standards take effect in 2007. In 2004 Cummins earnings increased three-fold to $545 million.
Cummins also publishes a sustainability report, supports an all-women's engineering college in India and is purchasing biodiverse forest land in Mexico. Company employees benefit from employee ownership and profit sharing.
Meanwhile, last year the company marked the half-centenary of the Cummins Foundation, set up by former chairman J. Irwin Miller, which has funded architecture in the company's home town of Columbus, earning it the sobriquet, the "Athens of the Prairie."
"It's great to be named at No.,1 but even without this list Cummins has a decades-long commitment to being environmentally friendly and making the company a diverse and welcoming workplace," Cummins corporate communications manager Janet Williams told CNN.
Business Ethics publisher and executive editor Michael Connor said corporate social responsibility was an increasingly important factor in measuring business performance amid tighter government legislation and a growing sense that ethical behavior had become a prerequisite to effective stakeholder relations.
"We believe this information is important to analysts, investors, consumers and the public," said Connor. "There is a surge in demand for information and perspectives on these issues."
