The Roberts Environmental Center of Claremont McKenna College (CMC) recently released a detailed analysis of the social responsibility reporting efforts of America’s top energy and utilities corporations. The two reports contain a compilation of Pacific Sustainability Index scores evaluating the environmental and social reporting of the 48 U.S. energy and utilities companies on the 2008 Fortune 1000 list.The reports score companies based on the reporting, intent, and performance of environmental and social sustainability efforts. The research, based entirely on material released on the firms’ Web sites, found that two of the smallest firms – Mirant (energy sector) and Pinnacle West Capital (utilities sector) – did the best jobs of describing details of their socially beneficial actions and environmental management. The lowest scores were also shared by small firms – Adams Resources and Energy, Inc., and Atmos Energy Corp. – but there was a good mix of firms of all sizes throughout the range of scoring. In neither sector is size a predictor of good reporting.
“In most sectors we analyze, particularly when large multinationals are included, we do see an effect of firm size on corporate reporting,” said J. Emil Morhardt, Roberts Professor of Environmental Biology at CMC and director of the Roberts Environmental Center. “The larger firms have greater visibility, are likely to be examined by investors and the public more closely, and they have more resources to do the data collection and reporting in the first place.” But, as Morhardt pointed out, “There are always some smaller companies that are proactive in this area, usually those that believe demonstrations of corporate environmental and social responsibility are expected from their customers.”
To create the report’s ranking, Morhardt and his team evaluated each company’s Web site using the Pacific Sustainability Index including sector-specific questions. The index uses a general systematic questionnaire to analyze the quality of sustainability reporting. The selection of questions was based on the most frequently-mentioned topics in almost 1,800 corporate sustainability documents analyzed from 2002 through 2008 by the Roberts Environmental Center. The company’s grades in this report were assigned on a grading curve, giving an A+ to the highest scoring companies and those with scores near it.
“In the current business climate, a demonstration of corporate social responsibility is more important than ever,” continued Morhardt. “What we are analyzing is the quality of that demonstration – how transparent the companies are with respect to their environmental and social issues, and how good a job they are doing resolving any problems they currently have and avoiding future ones.”
The detailed analyses also reveal what social and environmental themes these companies perceive to be most important to the American public today. The research screened Web site content to determine the most frequently reported topics. Companies with environmental achievements tended to tout their accountability and energy efficiency efforts while socially responsible businesses highlighted their superior policies and care for human rights.
To view the complete reports, visit the Roberts Environmental Center web site.
Scoring Summary
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Energy Sector Utilities Sector
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Highest Overall Scores
Mirant Pinnacle West Capital
Constellation Energy Wisconsin Energy
American Electric Power Duke Energy
Highest Environmental Reporting Scores
Mirant Pinnacle West Capital
Constellation Energy Wisconsin Energy
American Electric Power Pepco Holdings, Inc.
Highest Social Reporting Scores
Mirant Pinnacle West Capital
Constellation Energy Duke Energy
Integrys Energy Corp. Wisconsin Energy
Lowest Overall Scores
Adams Resources and Energy Atmos Energy Corp.
Ferrellgas Partners Ameren
New Jersey Resources AES Corp.