On this anniversary of the terrorist attacks on the United States, there is one question that some multinationals don’t want asked: which corporations directly or indirectly may be aiding terrorism? The answer may prove embarrassing – not only for companies that trade with countries that succor terrorists but also for the Bush Administration, which has taken a laissez faire attitude toward hidden corporate involvement with such states.

Two ideologically different organisations – the left-leaning Washington-based Investor Responsibility Research Center and the Conflict Securities Advisory Group headed by Roger Robinson, a National Security Council aide in the Reagan Administration – have joined forces to create the Global Security Risk Monitor. Its charge is to identify the 300 or so companies that do business with the six countries that the US State Department says sponsor terrorism: Iraq, Iran, North Korean, Syria, Libya and Sudan. IRRC and CSAG are rightly convinced that the life-blood of terrorism is the multinational money that greases the wheels of world trade.

Unlike the posturing and litmus tests on such issues as animal testing or alcohol that infect trendy corporate responsibility advocates, terrorist-corporate links, if publicised, could actually result in investor actions that might impact people’s lives – even save lives. “The negative impact this would have on share value and corporate reputations is a very legitimate market concern,” says Robinson.

"In a world where money is fungible and portfolios are global, any barrier to investment steers money to someone else,” agrees Stephen Davis of Davis Global Advisers, which specialises in international corporate governance. “Companies interested in global capital will have to make sure they have their house in order."

According to the IRRC, which came to prominence in the 1980s by spearheading the campaign against companies that did business with apartheid South Africa, and has since evolved into one of the gems in the corporate responsibility research field, the list includes more than a dozen companies in the Standard & Poor’s 500 LargeCap Index – all potentially at risk because of corporate exposure to these security concerns. Companies based in the European Union dominate, representing 35 percent of the total. Asian firms, the majority of which are based in Japan and South Korea, represent 25 percent. About 20 percent of the firms are North American. According to Robinson, 40 percent of the companies are oil or energy-related.

The IRRC and CSAG are not releasing the names of any companies publicly, but sell the research to investor groups for $12,500 per year. Although the results of this monitoring and the publicity it generates might stir investor action, particularly by large pension and index funds, as with all “social investing” screens, the announced motivation is to increase transparency. “It is important to recognise that the Monitor is not an endorsement of the United States' or any other nation's policies,” says IRRC President and Chief Executive Linda Crompton. “Instead, the Global Security Risk Monitor is a tool designed to help clients assess potential portfolio risk.”

GSRM data may exacerbate differences in public attitudes between Americans and Europeans about how best to reform rogue states. “The European view is trade with them, invest in them and encourage them to be more tolerant,” adds Stu Eizenstat, a former top official at the Commerce, Treasury and State Departments. “Our view is more to isolate them and to sanction them.”

It will be up to investors to decide whether such activities as construction projects or selling computer components aid and abet a potential enemy. Critics of terrorism have long argued, particularly in the case of Iraq, that apparently benign civilian trade is used by hard-line regimes to beef up military or terrorist capabilities. Iraq has benefited from trade deals with the German multinational Siemens, which sells telecom equipment, and Ford-owned Volvo, which sells trucks. General Electric has numerous deals with Syria and Iran. Japanese giants Marubeni, Mitsubishi and Tomen are partners in a consortium of firms searching for oil in Iran. Australian Oil and Gas pumps oil in Libya, while logistics firm Korea Express is taking over a large-scale water project in the North African country. PetroChina, which is listed on the New York Stock Exchange, and Petronas of Malaysia are developing oil resources in Sudan.

Investors hammered Nike for allegedly turning a blind eye toward sweatshop labour. Should these multinationals be forced to pay a political and economic price for doing “business as usual”? US pension funds, which when acting in concert can change corporate behaviour and influence public debates, are tentatively embracing this research. "We now have an obligation to make sure our investments are not inadvertently funneling money into terrorist coffers," says Pennsylvania Treasurer Barbara Hafer, who is also the president of the National Association of State Auditors, Comptrollers and Treasurers

This initiative undoubtedly will up the heat on the White House, which has so far banged the drum of an anti-terrorist war without requiring much change in the corporate behaviour that feeds the monster. “When you introduce national security or foreign policy elements into market calculations,” acknowledges Robinson, “it makes some folks nervous.” While the Bush Administration has announced its determination to cut off funding for terrorist organisations and those that provide safe harbor and support, it is vehemently opposed to a proposal by West Virginia Democratic Senator Robert Byrd that would require companies seeking access to US capital markets to publicly disclose financial dealings of $100,000 or more with countries that sponsor terrorism.

Here is a moment when “transparency” and “accountability” can be more than just buzzwords. The key to the success of this initiative is disclosure. Since the GSRM draws its data from public records, it will be all but impossible without forced disclosure for investors fully to evaluate corporate-terrorist links. The need for transparency also means that GSRM itself may have to evolve from a fee-only database to a public one. There is ample evidence that only when the general public has access to controversial information do corporations really feel the heat on their corporate behinds – and begin the grinding process of reform.