Newsweek magazine released its list of the greenest companies called Green Rankings list today. The list is in its third year and it will evaluate the environmental performance of America’s top 500 largest listed companies. This year, the list will also include 500 international companies as well.
The rankings take into account various areas of environmental sustainability like GHG emissions, water usage, waste management and natural-resource use. They also take into account CSR policies and initiatives globally. The rankings also include as assessment of each company’s reputation among sustainability professionals.
The research and ranking has been put together by Trucost and Sustainalytics. Trucost specializes in quantitative measurements of environmental performance and holds the most extensive data available on corporate environmental impacts. Sustainalytics is known for its credible and independent environmental analysis as well as its vast research coverage. So who ranked the highest?
Many of the companies in the top 20 (out of 500 ranked throughout the US) were in the technology sector. Dell, HP, Intel, Adobe, Yahoo, and Cisco all made the top 20. That’s not a huge surprise since many of these companies have been featured on 3p for their forward thinking programs. Notably absent were Google and Apple, which are both beloved by fans, but have (some might argue) less stringent CSR policies.
Also in the top 20 were several pharmaceutical and healthcare companies:
Johnson and Johnson, Baxter International, Bristol Meyers Squibb and Allergan. Notably absent were Medtronic and Novo Nordisk, two healthcare companies which are well known for their integrated reporting and attention to sustainability as a core business function.
How are these companies ranked?
The advisory panels was made up of five sustainability experts. Four of them are returning panelists ad these include John Elkington, executive chairman of Volans and cofounder of SustainAbility; Marjorie Kelly, senior associate at the Tellus Institute and cofounder of Business Ethics; Tom Murray, managing director of the Environmental Defense Fund’s corporate-partnerships program; and David Vidal, research director of global corporate citizenship at The Conference Board. Professor Michael Toffel of Harvard Business School was the fifth panelist and he brings research expertise on corporate environmental sustainability.
Companies are ranked by their overall Green Score which is made up of three components – Environmental Impact Score, Environmental Management Score, and Disclosure & Transparency Score. The advisory panel determines the weighting of each score. Trucost determined the Environmental Impact Score of each company, which is the overall environmental footprint of a company’s global operations. They took into account more than 700 metrics including emissions of nine key GHGs, water use, solid waste disposal, and emissions that contribute to acid rain and smog.
Sustainalytics compiled the Environmental Management Score and this assesses how a company manages its environmental footprint. It score measure the quality of each company’s environmental policies, programs, targets and initiatives, on the basis of company operations, suppliers and contractors, as well as products and services. The Disclosure & Transparency Score is a new component to their methodology this year and this assesses each company’s reporting and degree of transparency. This score evaluates the quality of company sustainability reporting and involvement in key transparency initiatives such as the Global Reporting Initiative and Carbon Disclosure Project.
Finally to come up with the ranking, the three component scores were standardized, combined using a weighted average, and mapped to a 100-point scale for publication.