ECO:FACT has put out a report (pdf) on the top 10 most environmentally and socially controversial companies of September 2008. A spin off from a Swiss bank 10 years ago, the company is based in Zurich and consults on the management of environmental, social and reputational risks, mainly in the financial sector.  They use a proprietary online tool, RepRisk, which "captures the reactions of print media, more than 600 NGO websites and newsletters, news websites, blogs and other online sources to controversial issues relevant to financial institutions, other companies, and projects."

To come up with the top 10 list, they use the following methodology:

• Monitor the level of criticism to which a company is exposed.
• Measure the risk to a company's reputation, not its actual reputation.
• The top ten list is made up of the companies with the highest current Reputational Risk Index scores and reflects the combined level of criticism in recent weeks among the 7000 companies they monitor.

This month, it's a who's who of the Chinese milk scandal, as well as some old standards; Sanlu, Yili, Nestlé, Siemens, Chevron, Fonterra, Shell, Monsanto, Exxon Mobil, and Mengniu Dairy. The issues on which these companies were most criticized include their products and the health and environmental issues created from them, impacts on ecosystems and landscapes and impacts on communities.

Leading the pack with 96 out of 100 points is Shijiazhuang Sanlu Group Holding Co. Ltd. (which is 43% owned by the New Zealand dairy company, Fonterra, with 62 points)  for selling milk powder contaminated with melamine.  The contaminated milk powder is implicated in three infant deaths and thousands of children falling ill, with an official product recall only happening after the intervention of the New Zealand government. Making matters worse, it is "alleged that farmers or dealers may have diluted milk with water and added melamine to make the milk's protein level appear higher than it really was".  Yili Industrial Group Co. Ltd finds itself on the list, with 70 out of 100 points, for the same reasons. And former supplier to Starbucks and KFC, China Mengniu Dairy Co Ltd, is caught up in the same scandal, with 55 points.

Nestlé, with a score of 63, finds itself embroiled in a number of scandals including human rights violations, alleged union busting, damaging workers' health, endangering ecosystems and even murder. They are also accused of using suppliers in the Ivory Coast that use child and slave labor. And not to be outdone by Sanlu, Yili and Fonterra, they, too, are implicated in the melamine tainted milk scandal.

Siemens, also at 63, is on the list for bribery and corruption, but at least lives were not lost.

Chevron Corporation, with 62 points, is "accused of faking clean-up efforts in the Amazonian rainforest of Ecuador." They also continue to be embroiled in human rights abuses in the Democratic Republic of Congo, Indonesia, Myanmar and Nigeria. And Chevron has been named in a lawsuit filed in U.S. court for supporting the apartheid regime in South Africa "by providing weapons, financing, fuel, transportation, and military technology."

Royal Dutch Shell, at 59 points, have made the list in part because of criticism over the carbon emissions caused by Shell's extraction operations at oil sands in Canada. Not satisfied with their environmental destruction in Canada, they are also accused of environmental devastation from their operations in Buenos Aires and violating OECD guidelines at their refinery there. And in South Durban, South Africa, a class action lawsuit is being prepared against them for the release of pollutants linked to high levels of cancer and asthma.

Our friends at Monsanto Corporation, with 59 points, have been called out by the Norwegian Pension Fund's Council on Ethics for supporting child labor via their hybrid cotton seed cultivation licenses in India. In addition, the documentary film "The World According to Monsanto", seems to be getting some traction in terms of reputational damage for Monsanto.

Exxon Mobil Corporation, with 57 points on the scale, rounds out the list. Exxon is currently being criticized for its pipeline project, with claims that it is funding government corruption and human rights abuses. You know it's bad when the World Bank withdraws funding as they have done with Exxon's Chad-Cameroon pipeline project. And Exxon was back in the news with another settlement, this time with a $4 million payout to the Maryland Department of the Environment for a 26,000-gallon gasoline spill at a Baltimore County service station in 2005.

Companies need to feel it in their bottomline, and poor reputation carries with it financial risk. At the end of the day, corporations have a responsibility to their shareholders to maximize profits. Like it or not, this is their raison d'etre. They have no obligation to behave ethically or do good in the world, unless local law dictates otherwise. The best thing we can do to change their behavior is to make it hurt financially when they do cause harm and to call for regulation and oversight. And to keep talking about the companies that cause harm, .