Over the past few decades, various transformations of the global political economy have seen the emergence of large and powerful transnational corporations (TNCs) across multiple sectors. Together with a network of supporting actors, including corporate-funded trade associations, think tanks, research institutions, and NGOs, these TNCs now possess huge amounts of economic and political power, and also play a major cultural role in society.

The simultaneous rise of philanthrocapitalism, as well as multi-stakeholder governance mechanisms that grant corporations formal roles in policymaking, has further entrenched corporate power
while liberalising international trade and investment agreements, diminishing the regulatory capacity of many governments.

In recent years, an expanding body of work has documented the contribution of various TNCs to disease, illness, and worsening health inequities, including through the supply and unethical marketing of harmful or unhealthy services and products, and the denial of access to essential medicines through practices such as excessive pricing. More indirectly, TNCs harm people’s health through the denial of public revenue from corporate tax abuse, exploitative labour practices, pollution and environmental degradation, the undermining of science and research, and unethical political lobbying. This has precipitated calls for the reduction of TNC power, including through stronger state intervention and accountability systems. However, the prevailing dominance of neoliberal ideas has led to a proliferation of non-binding, market-based forms of regulation that are often promoted as a preferred alternative to legally based, mandatory forms of regulation. One example is the use of privately generated scorecards or league tables that rank TNCs according to how well they contribute to socially-desirable objectives. It is argued by proponents of these scorecards that rankings will incentivise TNCs to improve their policies and practices to maintain or achieve a higher rank as this would enhance their reputation amongst consumers and investors, thereby benefiting them in market and financial terms.

UNU-IIGH convened a group of experts to produce a statement on corporate scorecards and accountability. Section 1 of this report identifies features of badly-designed corporate scorecards and rankings. Section 2 illustrates the problematic nature of badly-designed scorecards by contrasting the positive image they give well-ranked companies with examples of those same companies engaging in anti-social, unethical, and harmful behaviour. Finally, Section 3 discusses how corporate monitoring should be designed and used in the public interest.