Big Blue Is a Green Giant, Apparently

Published: December 15, 2008

by Timothy Prickett Morgan

Is it tough to be thinking about going green when a lot of companies these days are worried about going broke. But many companies are trying to do the right thing ecologically because they understand that it is also sometimes the right thing to do for the economy over a long term.

A report put out last week by Ceres, a coalition of investors, environmental groups, and various public interest organizations that is trying to goad corporations into taking some responsibility for climate change, reviewed 63 of the world's biggest companies in 11 different industry sectors and gave them grades on how green they were.

The companies were ranked on a scale of 1 to 100, and unlike many grading systems, companies really did get bad grades in the rankings--they were not all crowded in between 90 and 100 to make everyone feel good about themselves. Ceres was not all that impressed with how companies were doing, to say the least. In the report, entitled Corporate Governance and Climate Change: Consumer and Technology Companies (which you can read here), Ceres said that some companies were taking climate change and other green issues seriously, with 11 of the 63 companies having their boards getting climate-related updates from management and seven having CEOs that have taken what Ceres described as leadership roles in climate change initiatives. However, not one company examined had yet linked C-level executive performance to the greening of their own companies. (This is not surprising, given that public companies exist mostly to profit and care about green issues mostly because of the good public relations it can bring and because greening can be a legitimate way to cut costs.)

Anyway, the rankings were based on various weighted metrics, which include board oversight on green issues (12 percent), management execution (20 percent), public disclosure (14 per cent), emissions accounting (16 percent), and strategic planning and performance (38 percent). This latter category is the big one, and it includes improving the energy efficiency of company operations, reducing greenhouse gas emissions in a company's own operations as well as in its supply chains, and making a company's products more energy efficient.

In the tech sector, IBM had the highest ranking, at a score of 79, which was the highest score of any company examined. Dell came in next, with a 77 score, followed by Sun Microsystems with a 63 and Hewlett-Packard with a 62. Apple had the lowest rank of the seven IT vendors in the report, with a score of 28.

The Ceres report broke out four semiconductor makers as a separate category, and Intel came out on top with a score of 72, followed by chip equipment maker Applied Materials with its 67 score. Taiwan Semiconductor rated a 56, and Texas Instruments got a paltry 28. The rational for each score is presented in the full report, which you can read here. The report said that IBM, Dell, and Intel were strong on innovation as it related to power conservation and in running their own operations more efficiently, and Big Blue was singled out because its energy conservation initiative in 2007 saved the company nearly $20 million, because it exceeded its goal of reducing greenhouse gas emissions, and because the company's semiconductor operations are conserving water.

The only other companies getting green grades even anywhere close to those of IBM, Dell, and Intel were shoe maker Nike, retailer Tecso, and pharmaceutical maker Johnson & Johnson. Retailer Wal-Mart came pretty close, too. More than half of the companies reviewed had under 50 points, and the median score was 38 points. Considering how inefficient and ungreen the corporate world is, that sounds about right. But, measuring--however vague--is the first step in the process of moving forward.

"Many companies, especially technology and pharmaceutical firms, are doing a better job of integrating climate change into their business strategies," explains Mindy Lubber, president of Ceres. "But the overall responses among these companies are very spotty, especially in the restaurant, real estate and travel and leisure sectors where climate change is barely on their radar. With or without a recession, climate change is a core business issue that all consumer and tech companies should be focused on."

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