'Climate Counts' Reveals Which Companies Are Walking the Walk

At last, the climate revolution is getting -- well, consumer-friendly.

Today marks the launch of Climate Counts, a new nonprofit initiative to rate major consumer brands on their climate commitments and performance. The project, on whose board I sit, represents the first time big companies have been rated consistently on climate using a comprehensive, consistent, and credible set of metrics.

This is no small matter. As climate change has grown in public consciousness, companies increasingly are stepping up to the plate, making commitments to reduce their greenhouse gas emissions, or announcing carbon-neutral products, services, or events. There's a steady stream of business announcements, as we report daily on ClimateBiz.com. (Business for Social Responsibility recently compiled a list of companies and projects that have committed to going carbon neutral, downloadable here.)

But which of these is real, and which are mere marketing gimmicks? Which companies are making substantive commitments and progress, and which are mere window dressing? Until now, it's been hard to discern.

Climate Counts began about a year ago, an offshoot of Climate: A Crisis Averted, the four-minute "documentary from the future" produced by the yogurt company Stonyfield Farm. (I was co-writer and executive producer of the movie.) Gary Hirshberg, Stonyfield's "CE-Yo," who spearheaded the project, wanted to do more to engage consumers directly in the climate action movement. Climate Counts was the result.

The data released today rate 56 companies on a 100-point scale based on more than 20 criteria in four categories:

• How well does the company measure its climate footprint? (up to 22 points)
• How much has the company done to reduce its global warming pollution? (up to 56 points)
• Does the company explicitly support (or express intent to block) progressive climate legislation? (up to 10 points)
• How clearly and comprehensively does the company publicly disclose its climate protection efforts? (up to 12 points)

You can view and download the scorecard and its criteria here.

The scorecard methodology was developed by GreenOrder, the strategy firm (with which I am also affiliated) that has helped a number of big companies address sustainability challenges and opportunities. GreenOrder also served as third-party verifier of the data collection process. All of the rated companies were shown the data Climate Counts collected about them -- compiled from a range of publicly available sources -- and were invited to amend or correct the information. Most did; a few did not.

The 56 rated companies garnered scores ranging from 77 to zero. You can view the individual company ratings alphabetically, by ranking, or by sector. There's also a downloadable pocket-sized guide (PDF) you can use while shopping. You can even get the Climate Counts score of a particular company delivered to your cell phone.

And the whole shebang, including all of the company ratings, is available in a downloadable 65-page report (PDF).

This first batch of rated companies reflect major consumer brands in eight sectors -- Apparel/Accessories, Beverages and Beer, Consumer Electronics, Food Products, Food Services, Household Products, Internet and Software, and Media. There will be a new batch of ratings every six months or so, and all company ratings will be updated annually.

There were a few surprises. For example, the company that scored highest was Canon, the consumer electronics company, which has not been very visible as a climate leader. On the one hand, that's rather refreshing: a company doing good, green work but not necessarily banging the drum. On the other, it's risky: Being humble about one's corporate climate performance will no longer be seen as an asset. Increasingly, as Climate Counts underscores, companies are expected to be public and transparent about their climate commitments and performance.

Other companies in the top ten include Nike, Unilever, IBM, Toshiba, Stonyfield Farm, General Electric, Motorola, and Hewlett-Packard, with News Corp. and Coca-Cola tied for tenth place.

Companies who fared worst include Amazon.com, Wendy's, Darden Restaurants (Red Lobster, Olive Garden, and others), Burger King, Jones Apparel (Anne Klein, Nine West, and many other brands), Clorox, Yum! Brands (KFC, Pizza Hut, Taco Bell, others), Levi Strauss, and eBay.

What does it mean to be a low-scoring company? The 16 companies that scored 10 points or less haven't taken even the first meaningful steps to address their climate impacts. Few of these companies have measured or assessed their climate footprint, set clear policies or goals, or demonstrated that they take their climate actions seriously and are ready to engage the public in their plans.

On the eve of the Climate Counts launch, I asked Gary Hirshberg his thoughts on how this project turned out. "What surprised me is how elegantly simple and workable this rating tool actually is," he responded. "The scoring system effectively measures a minimal level of commitment. We focused on which companies are doing the basic stuff needed to make themselves a good climate citizen. It will do exactly what we wanted it to do in terms of letting consumers and investors know which companies are doing that."

Hirshberg also said that he was "wowed" by how useful the tool was for his own company. (Stonyfield rated a respectable 62 points, sixth overall, a score that Hirshberg admits he expected to be higher; its parent company, Group Danone, fared less well, scoring 50 points.) "The scoring gave us a very simple and reliable way of knowing internally if we are doing everything we could be -- which it turns out we're not -- and it gave me an incredible index for goal-setting. This isn't just a one-time tool. This is setting up a continuous improvement process."

As a result of going through the Climate Counts scoring process, Stonyfield is setting up ten "Mission Action Plan" groups -- teams engaged on different aspects of company operations, from transportation to processing to purchasing. "They're focused on what it's going to take to improve our score," says Hirshberg. For example, he says, Ryan Boccelli, Stonyfield's Director of Logistics, is now using the metrics of the Climate Counts scorecard to better manage Stonyfield's relationship with Ryder, the company's national transportation partner. "Ryan now has an index, a language, and a team because everyone else is able to use the same language. It's really revolutionized our abilities."

That's the ultimate goal, of course. Rating companies and educating consumers about leaders and laggards on climate change is just the means to an end. The goal is to move the needle -- to get companies to use their ratings as a tool for improvement. I asked Hirshberg his vision of "wild success" for Climate Counts. His relatively modest response: That rated companies, on average, double their scores over the next twelve months.

We'll see in a year from now, when these companies are re-rated, whether that vision comes to pass -- and whether the public ratings of companies can change the climate on corporate action.

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Comments

[Marc Gunther]

I'm skeptical about this idea, as you know, if it depends on getting consumers to change their purchasing behavior.
On the other hand, Climate Counts and the publicity it generates may by itself be enough to persuade a few more companies to pay attention to climate change issues. I know from my first-hand experience inside Time Warner that the company is now starting to take GHG emissions reporting and reductions seriously (in part because of News Corp.'s promise to become climate neutral). Having a well-publicized metric to watch will only spur futher action.
So, Joel, best of luck with this!

[Mark McElroy]

Joel, you said the Climate Counts scheme is "the first time big companies have been rated consistently on climate using a comprehensive, consistent, and credible set of metrics." This is not true. As you know, I think, we introduced a Global Warming Footprint method last year that measures corporate emissions against a CO2 stabilization plan developed by climatologists including Tom Wiglet at the National Center for Atmospheric Research in Boulder, CO. Thus, our approach holds companies quantitatively accountable to a credible plan for not just lowering emissions, but lowering by an amount sufficient to achieve safe CO2 concentrations in the atmosphere by 2150. I note that there is no such standard of performance in the Climate Counts scheme. Ben & Jerry's has used our method and is about to publish the results in their 2006 sustainability report. Our calculator is now posted online for free public use, along with some sample calculations, on our website at www.sustainableinnovation.org.

Regards,

Mark

[genie Faulkner]

Almost every time I want more information and click on the entry to provide it, I get a "this site is unavailable, or the like" and cannot go further. What?!!

[Dave Stangis]

Thanks Joel and Mark. There are limitations to every ranking, but I appreciate you taking the carrot approach. It got my attention and now I can review your methodology and look internally to check to see that all my "i"s are dotted and "t"s are crossed with regard to Climate Counts. I use every external ranking and rating as a managment tool - shouldn't all companies??

[Bob Langert]

I commend this effort because we need to make the consumer as informed as possible so they can act upon these types of values in their everyday purchasing world. Beyond what a company can do directly, there ought to be a better way to "rate" how a company works with its supply chain. For example, preserving our forests are very, very important. Some 20% of global warming is from forest destruction. I think you will find one of our efforts interesting. McDonald's has worked with Greenpeace on preserving the Amazon rainforest involving soy farming. Link:
http://csr.blogs.mcdonalds.com/default.asp?mode=blog&category=18020

[Alan Pong]

I am not surprised at all at the findings. I have been in the energy management industry since 1989. Eventhough people are now a bit aware as to the climate impacts of our poor energy usage very few companies really do much toward energy efficiency. What shocks me is how ignorant the industry has become.

What I mean is that now there has been a basic rebranding of green buildings to LEED certified. I have re-engineered buildings to the lowest energy metrics such as getting the Cypress Semiconductor headquarters down to a mere 11 kilowatt hours per square feet per year compared to what EPA Energy star award level of 17 kilowatt hours per square feet per year. I calculated that we eliminated over 400 automobiles off the road each year forever by the improvements we made to the relatively small set of 5 buildings for Cypress Semiconductor. It is not the automobiles wasting the most carbon it is the commercial buildings and plants.

I am all for green buildings and LEEDS but the ironic thing is most LEED buildings are NOT energy efficient. There is no requirement of a true metric or benchmark required. If they really wanted to practice what they preach then the basic LEED requirement would be EPA Energy start first then the other green levels could be gold, etc.

The other complete ignorance in the press is that we need more new technology. I consistently find that 95% of the commercial facilities I visit are at least 20% wasteful and the average is typically 40-50% wasteful. At FSI we typically bring facilities below EPA energy star levels reducing their usage by 40-50% and do so guaranteed at their utility meter for under a two year payback. I've done multiple projects for people like Cypress Semiconductor and General Electric but for the most part the industry talks green and energy reduction but does very little. If commercial facilities brought their consumption to EPA energy star levels by energy efficiency we would meet the worldwide goals of carbon with no new technology at all.