Published on October 26th, 2011 | by Michael Ricciardi
Which Are the Greenest Companies in the U.S.? – The 2011 'Green Rankings'
Despite the disheartening defeats for environmental causes in the past year or so (with one recent exception: the upholding of the forest ‘roadless rule’), it is more than encouraging to learn that sound environmental management amongst many of our leading businesses has become a competitive arena…Yes, it’s true, really.
Various business quality rankings such as the third annual Green Rankings, compiled by Newsweek and reported here, are really just the outward signs of this emerging competitiveness; many companies have fully embraced environmental management ‘best practices’ standards, and have adopted sound environmental compliance, assessment and disclosure guidelines– including the top-ranked, green company in this year’s list, which initiated environmental protection guidelines even before the EPA did (more on that below).
This is not to say that such rankings don’t have an important social role to play. While concern for environmental impacts is not yet a universal reality in the private sector– many well-known companies lag shockingly far behind the top ranked ones — it is a trend with momentum. And, simply being assessed and ranked on this list, provides a public information metric that can translate into social pressure on these companies to step up their green game.
In compiling the Green Rankings (which cover two groups: the top 500 greenest companies in the U.S., and the top 500 greenest in the World), Newsweek made extensive use of environmental, social and governance data, provided by Trucost and Sustainalytics, to produce three distinct scores: an Environmental Impact Score, an Environmental Management Score, and an Environmental Disclosure Score.
These were then combined to give one, overall score for each company (to learn more about how this data was compiled and scored, read the full methodology).
So then, who’s the number one “greenest” company in the U.S.?
And, IBM ranked #2 on the global green rankings list
So, just how did IBM get to be the top green company in the U.S.? According to the Goodfunds Wealth Management newsletter (October, 2011 ), this is because:
‘IBM has long been committed to environmental responsibility. The company employs roughly 426,750 people and had about $99.9 billion in revenue in 2010. In 1971, IBM formalized a policy that was designed to put the company on the environmental forefront in all of its business activities. And in the intervening 40 years, many of the company’s initiatives have truly been ahead of their time. For instance, IBM developed requirements for secondary containment for underground storage tanks in 1979, while the EPA waited until 1985 to create the Office of Underground Storage Tanks, which was designed to develop regulatory programs for such tanks.”
But wait, there’s more:
‘The company has also been forward-thinking in terms of environmental disclosure. IBM released its first “IBM and the Environment” report in 1990, a full 10 years before the Global Reporting Initiative released its guidelines for environmental reporting. More recently, IBM established rules that all of its suppliers develop and sustain a corporate-responsibility and environmental-management system, and disclose their performance.’
‘In 2010, it became the first company to qualify four-socket servers for Energy Star requirements for servers-perhaps not surprising, as it was the charter member of Energy Star in the early 1990s.’ [emphasis added]
Further, as noted in the Daily Beast report, in the past 20 years,
‘IBM says it has conserved 5.4 million kilowatt-hours of electricity over that time, cutting its CO₂ emissions and saving the company more than $400 million in the process.’
Top five greenest U.S. Companies and how they compare to Europe and elsewhere:
The U.S., of course, lags behind Europe and other nations on the sustainability front (another global source of corporate “peer pressure”), with the next U.S. company, Hewlett Packard (HP), coming in at #15 on the global green rankings, but #2 on the U.S. rankings.
The #1 green spot on the global rankings went to German financial giant Munich Re. Another top-ranked global, green company, Societe Generale, which figured prominently in the financial collapse/bailout of 2008, ranks #11.
Amongst the exclusively U.S. companies, Sprint ranked #3, with Baxter (a Healthcare provider) coming in at #4, and Dell at #5.
Other well-known corporations fared decently enough (by U.S. standards); Microsoft came in at 31, and Google at 59, for example, while others, like Amazon, came in at a dismal 323 on the U.S rankings. This low score was due in part to Amazon receiving an Environmental Disclosure Score of ‘0’ (with its other scores 1/3 lower than the average).
As a regular (holiday/birthday) customer of Amazon, I do hope they improve.
What the Green Rankings really indicate:
As hinted at in those IBM figures, perhaps the most crucial factor in the greening of corporate America is the bottom line. Quoting once more from the Goodfunds newsletter:
‘… many studies are showing that companies that excel in environmental, social and corporate governance are financially outperforming their peers. Dr. James Salo, Senior Vice President, Trucost explains it this way, “The management of environmental performance and impacts is now a competitive landscape where companies fight to gain competitive advantage.’
To review the rankings in more detail, visit these Daily Beast pages:
What does it mean to be a “green business”?
In general, business is described as green if it matches the following four criteria:
- It incorporates principles of sustainability into each of its business decisions.
- It supplies environmental products and/or environmentally friendly services that replace demand for non-green products and/or services.
- It is greener than traditional competition.
- It has made an enduring commitment to environmental principles in its business operations. [source: wikipedia.org]
Being green is also directly related to sustainability, which, according to the Brundtland Report, is a “three-legged stool of people, planet, and profit” (also known as the “triple bottom line” or “the three pillars”).
top photo: IBM Rochester facility in Minnesota.