16 October 2011:
When Newsweek ran its first Green Rankings two years ago, climate change was high on the agenda. The U.S. House had passed a cap-and-trade bill to put a price on carbon, and the world’s biggest economies were about to make history with an agreement to cut greenhouse-gas emissions.
Since then, green momentum has seriously stalled, at least in the public sector. The U.N. Climate Change Conference in Copenhagen at the end of 2009 ended without an agreement, and climate science in the U.S. has been politicized by Tea Partiers and others. A skeptical Congress, plus the on-going economic downturn, have made environmental regulations a tough sell. Elsewhere in the world, there is some movement—such as in Australia, where the lower house has just passed a carbon tax—but it’s slow.
If governments are hesitating, many of the globe’s big companies missed the memo. Top-ranked companies are approaching green projects with increasing tenacity, even in this weak economy. Corporate sustainability, it seems, is here for the long haul—it makes sense not just for the sake of the planet, but for business. “Big companies have decided that this is a long-term play,” says Thomas Lyon, a professor at the University of Michigan’s Ross School of Business.
For corporate executives, what matters is that waste cuts into profits, and that reducing wasted energy, for example, curbs greenhouse-gas emissions while bolstering the bottom line. We face a future in which resources that were once taken for granted—water, land, minerals, fossil fuels—will be limited and costly. Preparing now to succeed in—and even profit from—that difficult future could make all the difference. “We don’t expect a clear-cut policy in the U.S. any time soon,” says Mark Vachon, who leads the Ecomagination program at GE, No. 63 on the U.S. list. “But that doesn’t mean we ought to put our pencils down. In fact, having business lead in this space might be exactly what we should do.”
Our Green Rankings, fully posted at Newsweek.com/green, comprise two lists, one that surveys the 500 biggest companies in America and another of the 500 largest companies in the world. Both highlight firms that are leading—or lagging—in environmental performance. The data—crunched in cooperation with Trucost and Sustainalytics, two leading environmental-research firms—assess companies’ environmental footprint (including greenhouse-gas emissions and water use); management (including environmental policies, programs, and initiatives); and disclosure (including company reporting and involvement in transparency initiatives). Underlying data are drawn from a variety of sources, including the companies themselves, and vetted for reliability. The hundreds of companies tracked by Newsweek are collectively responsible for more than 6 billion tons of greenhouse-gas emissions each year, nearly equivalent to all the emissions produced annually by the United States. And that number would be exponentially larger if it included the emissions that result from use of the products many of them sell (energy used by the computers that Dell sells, for example). But the ones that are taking this most se-riously are not only reducing their operational impacts; they are making more efficient products—magnifying the effects.