As Newsweek's international green ranking of large public companies hit the newsstands, Dr. James Salo asked: "What environmental impacts matter most?"
Newsweek used Trucost data for its green rankings, as in 2009. For the first time, the assessment covered the 100 largest companies in the world. The 500 largest public companies in America were ranked for the second time.
So what do the rankings tell us? Greenhouse gas (GHG) emissions account for up to two-thirds of the environmental impacts of companies in some sectors. However, water contributes up to 60% of the environmental footprints of some companies. The analysis conducted for the Green Rankings shows that water deserves the growing attention it has been receiving from groups including Ceres, the Carbon Disclosure Project and the UN PRI.
Together GHG emissions and water use contribute an average of 70% of the total environmental impact of companies included in the Newsweek Green Rankings. Pretty incredible. Yet, under half of the companies in the Green Rankings adequately disclosed their GHG emissions from their direct operations and electricity use, and under one-quarter of the companies reported their water use.
Disclosure levels are even poorer for some of the other impacts analysed, including waste generation and disposal, air pollution, volatile organic compounds and the extraction and mining of natural resources. Which of these other environmental impacts are relevant to individual companies - or not - depends largely on individual business activities and practices.
The lack of comprehensive and standardised disclosure across the board is troubling. The measurement of environmental impacts is the means for companies to gather information needed to prioritise key areas for reduction. Demand for measurement and disclosure is therefore growing. Pressure to disclose data is increasingly coming from companies' business customers, which are starting to report and manage their supply chain impacts. Companies looking to improve their Green Rankings score often ask how to reduce their environmental impacts. While there is much more to it and priorities would differ from company to company, the short answer is that the discovery of the low-lying fruit begins with finding out what impacts are and where they come from.