Monday, January 25, 2010
Inside Newsweek's New Green Corporate Rankings
Read more about Newsweek's Green Corporate Ranking..
Today, Newsweek magazine unveils its first annual Green Rankings, the fruits of a near-Herculean endeavor: rating and ranking the environmental performance, achievements, and reputation of the S&P 500. The list, published today in a 12-page special section in the magazine as well as online, is the culmination of an 18-month journey.
The resulting rankings are straightforward, almost elegant, but it wasn't a straight or easy path. Like most such rankings, they're imperfect. They'll likely be challenged and debated, especially by some of the lower-ranking companies, not to mention the activist/blogosphere community. But it may well be the best effort yet to rigorously and comprehensively assess the mainstream corporate marketplace — at least in the U.S.
First, the basics. The Newsweek rankings assess the S&P 500 -- the 500 largest publicly held companies that trade on either the New York Stock Exchange or NASDAQ, the two largest American stock markets -- on three metrics:
• an "environmental impact score," based on more than 700 metrics, compiled by Trucost, a leading provider of data and analysis on company emissions and natural resource use;
• a "green policies score," an analysis of corporate policies and initiatives by KLD Research & Analytics, one of the pioneers in socially responsible investing research; and
• a "reputation survey score" resulting from a survey of CEOs, corporate environmental officers, and academics conducted by CorporateRegister.com, an online directory of company-issued CSR, sustainability, and environment reports from around the world.
Each company's score, and thus its ranking, was based on a weighted average of those three components: 45 percent for the impact score, 45 percent for the policies score, and 10 percent for the reputation score.