Today, Newsweek launched a ranking of the greenest companies in America in its current issue and Hewlett-Packard took top honors. The Newsweek Green Rankings is the first-ever report based on companies’ actual environmental footprint, policies and practices. The twelve-page report in the September 28 issue, features a green ranking of America’s 500 largest publicly-traded companies as measured by revenue, market capitalization and number of employees. On Newsweek.com, users can search and sort the data in several ways, analyze the detailed methodology of the study and submit and review comments.
“This is the first time a media organization has ranked companies in this way,” said Kathleen Deveny, Global Business Editor of Newsweek. “Most green lists are anecdotal — ours is the result of a massive database research project conducted in collaboration with three of the leading players in environmental research: KLD, Trucost and Corporate Register.”
The companies are ranked based on a number of criteria, including: each company’s greenhouse gas emissions, toxic waste emissions and use of other natural resources. Newsweek and its partners also assessed the companies’ management of environmental issues and policies, regulatory compliance and policies concerning climate change. The rankings also factor in the results of a reputational survey of CEOs, corporate social responsibility officers, members of the media, academics, and members of key environmental groups.
Technology firms dominated the top of the list and energy, utility, or coal-mining companies dominated the bottom. The only company from that group to make it to the top of the list is Marathon Oil. Joel Makower of GreenBiz noted that, “Most tech companies don’t actually manufacture anything themselves these days — they mostly purchase components from other manufacturers — while utilities and mining companies are known to make quite a mess, in terms of emissions and other impacts.”
The top 10 greenest companies in America on the Newsweek Green Rankings are:
1. Hewlett-Packard Company
2. Dell Inc.
3. Johnson & Johnson
4. Intel Corporation
6. State Street Corporation
7. NIKE, Inc.
8. Bristol-Myers Squibb Company
9. Applied Materials, Inc.
10. Starbucks Corporation
Newsweek also broke out the list by industry sector, determining the top 10 greenest companies in their respective industries.
The top companies from each industry are:
Banks & Insurance: Wells Fargo & Company
Basic Material: Praxair, Inc.
Financial Services: State Street Corporation
Food & Beverage: Coca-Cola Enterprises, Inc.
General Industrials, Construction & Materials: ITT Corporation
Health Care Equipment & Services: Baxter International Inc.
Industrial Goods & Services: Agilent Technologies, Inc.
Industrial Transportation, Aerospace & Defense: United Technologies Corporation
Media, Travel & Leisure: Starbucks Corporation
Oil & Gas: Marathon Oil Corporation
Personal and Household Goods, Autos & Auto Parts: NIKE, Inc.
Pharmaceuticals & Biotechnology: Johnson & Johnson
Retail: Kohl’s Corporation
Technology & Telecommunications: Hewlett-Packard Company
Utilities: PG&E Corporation
So who made to the bottom of the list of 500 firms? They are: FirstEnergy, Southern, Bunge, American Electric Power, Ameren, Consol Energy, ConAgra Foods, Allegheny Energy, and NRG Energy. Peabody Energy came in last place.
Newsweek collaborated with three of the leading environmental research experts: KLD Research and Analytics, the lead partner on the project, Trucost and CorporateRegister.com. Newsweek also assembled an expert panel to appraise the Newsweek Green Ranking methodology and review the preliminary and final list. The panelists are:
* Dan Esty, Professor of Environmental Law and Policy, Yale University
* Marjorie Kelly, Senior Associate at Tellus Institute and co-founder and former editor of Business Ethics Magazine
* Wood Turner, Executive Director, Climate Counts
* David Vidal, Global Corporate Citizenship Research Director, The Conference Board
* John Steelman, The Climate Center, National Resource Defense Council
The GREEN SCORE for each company is based on three components:
*The ENVIRONMENTAL IMPACT SCORE, based on data compiled by Trucost, is a comprehensive and standardized quantitative performance measurement that captures the total cost of all environmental impacts of a corporation’s global operations. Over 700 variables are summarized in the EIS. This figure is normalized against a company’s annual revenues, so that companies of all sizes and industries can be compared.
*The GREEN POLICIES SCORE, derived from data collected by KLD, reflects an analytical assessment of a company’s environmental policies and performance. Its scoring model captures best-in-class policies, programs and initiatives, as well as regulatory infractions, lawsuits and community impacts, among other indicators.
*The REPUTATION SCORE is based on an opinion survey of corporate social responsibility (CSR) professionals, academics and other environmental experts who subscribe to CorporateRegister.com. CEOs or high-ranking officials in all companies on the Newsweek 500 list were also invited to participate.
KLD, Trucost and CorporateRegister.com scored each company according to their specific methodologies, then converted the results to Z-scores, a widely accepted statistical technique that measures how well a firm compares to the average score of the collective group. The overall Newsweek Green Score was calculated as the weighted sum of the three component Z-scores: 45 percent for the Environmental Impact Score, 45 percent for the Green Policies Score, which takes into consideration sector differences, so that various industries can be judged against each other, and 10 percent for the Reputation Score, which also reflects sector analysis.
The rankings also contain a column reporting each company’s emissions of greenhouse gases (GHGs)—a reflection of the importance of GHGs as a key component in a corporation’s environmental footprint. The GHG data for the rankings comes from Trucost. Newsweek.com contains additional GHG data reported by companies to KLD, Trucost and the Carbon Disclosure Project, which collects GHG data on over 2,500 companies worldwide.
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© 2009, Tracey de Morsella. All rights reserved. Do not republish.