Trucost Blog

Today the 2010 Newsweek Green Rankings were released, the second annual environmental assessment of the 500 largest public companies in America, and the first assessment of the 100 largest companies in the world. Trucost was again selected by Newsweek as the environmental impact data partner.

So what do the rankings tell us?  What environmental risks do companies need to keep tabs on?  What are the most significant environmental impacts that leading companies are managing?

It is with little surprise that greenhouse gas emissions are a major contributor to the total environmental impact for most companies.  Greenhouse gas emissions account for between a quarter and two thirds of the total environmental footprint of Green Ranking companies' depending on the business sectors they operate in.  Perhaps it is more surprising that for some companies greenhouse gas emissions only contribute 25%. 

Where is the rest of the impact coming from?

Water use has been receiving much more attention recently from companies and investors alike.  With efforts coming from many groups including Ceres, CDP, from companies (also see recent reports from both Coca Cola and PepsiCo) and from Trucost for the UN PRI.  As a source of environmental impact, water deserves this increasing attention, in the Green Rankings, at least 10% and up to 60% of the environmental impact came from water.

Together greenhouse gas emissions and water use contribute an average of 70% of the total environmental impact of companies included in the Newsweek Green Rankings. 

The balance of each company's environmental footprint may come from the generation and disposal of waste, the emission of acid rain precursors, volatile organic compounds, dust/particulates, the extraction and mining of natural resources, including mining of coal, drilling and extraction of oil and natural gas.  Which of these other environmental impacts are relevant to companies, and which barely are at all, depends highly on their business and its activities. 

It's worth restating, greenhouse gas emissions and water use contribute an average of 70% of the total environmental impact of companies.  Pretty incredible.  Yet, under half of the companies in the Green Rankings adequately disclosed their greenhouse gas emissions from their direct operations and electricity use, and under a quarter of the companies reported their water use.

This lack of comprehensive and standardized disclosure across the board is troubling.  Troubling as the measurement of environmental impacts is the means for companies to gather essential information required to then prioritize key areas for reduction.  While we prefer standardized disclosed data, we can and do fill in the data gaps for our clients (corporate, investor, or otherwise) using our patented methodology as we have over the last 10 years.

However, the demand for measurement and disclosure is growing, slowly.  Pressure is increasingly coming from companies' customers as a number of leading organizations are beginning to report their supply chain impacts, ahead of the release of the Greenhouse Gas Protocol's supply chain standard due to be published in December.  And as larger purchasing organizations look to collect data to report on their supply chains, their suppliers are being pushed to disclose. This demand for environmental data from many different parties is only going to grow, as the significance of the impacts are better understood.

I'm often asked how a company can reduce their environmental impacts, often relating to improving their Green Rankings score. 

While there is much more to it, the short answer is that the low lying fruit differs from company to company, but the discovery of the low lying fruit begins with finding out what your impacts are and where they come from.

Manage the environmental impacts associated with your organisation