by Thomas Miner

Dell earned the top spot, with IBM and HP coming in 2nd and 3rd respectively, in Newsweek’s 2nd annual Green Rankings – a yearly ranking of the 500 largest publicly traded companies in the United States. The top five companies in this year’s rankings are an exact repeat of the 2009 rankings.

Newsweek also ranked the largest 100 global companies on the same criteria, with the top 3 companies as IBM, HP and Johnson and Johnson. Sony and GlaxoSmithKline rounded out the top 5. Because the global ranking includes U.S. companies, some appear on both the U.S. 500 and the Global 100 lists.

Newsweek said that tech companies dominated this year’s Green Rankings—in part because they make low-impact products, like software, that inevitably have a smaller environmental footprint than, say, a utility. Bottom-line considerations are a big part of what’s driving tech companies in the green direction – for example Hewlett-Packard says its current IT systems use 66 percent less energy than those designed in 2005.

Methodology

Newsweek selected the 500 largest publicly traded U.S. companies, as measured by revenue, market capitalization, and number of employees. Each one of them was given a Green Score, which is based on the following 3 components: The Environmental Impact Score, compiled by Trucost, is based on more than 700 metrics, including greenhouse-gas emissions, water use, and solid-waste disposal. The Green Policies Score is based on data collected by MSCI ESG Research, and reflects an analytical assessment of a company’s environmental policies and initiatives. The Reputation Score is based on a survey of academics, environmental officers, and CEOs. To calculate a company’s overall ranking, the three component scores were standardized, combined using a weighted average (45 percent for the Environmental Impact Score, 45 percent for the Green Policies Score, and 10 percent for the Reputation Survey), and mapped to a 100-point scale.

Two important changes were made to the methodology this year - a measure of how much data each company discloses in its Environmental Impact Score is included and, specifically for financial services firms, the environmental footprint of companies in their investment and lending portfolios was considered.

Because of these changes, the scores are not comparable to the 2009 rankings.

Photo by Dan McKay/flickr/Creative Commons

Reprinted with permission from Sustainable Life Media