In the race to become the world’s greenest company, Team Finance and Team Technology have taken the lead.
So say the results of Newsweek’s fourth-annual Green Rankings released this morning, which ranked IBM as the top environmental performer out of the 500 largest publicly traded U.S. companies for the second year in a row, and fourth-best company globally.
Brazil-based Santander Bank topped Newsweek's second list of rankings, of the top 500 publicly traded global companies. Finance and IT sector companies dominated this group. Together, they represented eight out of the top 10 companies on the global list.
The peer-reviewed rankings, considered perhaps the most rigorous of its kind and determined in partnership with quantitative experts Trucost and Sustainalytics, scored companies based on their performance in three areas: their total environmental footprint, their sustainable programs and policies, and the efficacy of their reporting and transparency.
(To read more about the study's methodology and what makes this year's measurements more meaningful than ever, read GreenBiz Executive Editor Joel Makower's piece here).
For Sprint -- the only telecommunications company to make the U.S. top 10 list -- the acknowledgment “signifies that we’re making progress in running a more sustainable and socially-minded business,” Bill White, the company’s senior vice president of corporate responsibility, told GreenBiz. “We believed we could run a more sustainable business through everyday decision making. That kind of thinking has driven a greener culture across our employees.”
This year's rankings saw a surge in progress for the U.S. tech sector. A few companies moved up the ranks -- including Intel, which jumped from #15 to #7 -- and granted the sector seven of the top 10 slots on the U.S. list.
One tech company that's rocketed up the list over the past few years is CA Technologies; the N.Y.-based IT management software company ranked #5 this year. In 2011, it was ranked #9, and #46 the year before that.
Cynthia Curtis, a vice president at the company and its Chief Sustainability Officer, attributed CA Technologies’s success to a focused effort on getting a much better handle on its footprint, putting in place a more robust governance model, reporting more of its sources and inputting much more real versus extrapolated data into its system.
“That helped us tremendously in regards to really knowing where to focus,” she said. “It’s been a process of methodically going through and focusing on those areas where we can have a real impact.”
U.S. office products retailers had a successful year as well, with Staples rising from its #17 ranking in 2011 to a #10 ranking in 2012. Office Depot retained its place in the top 10, though slid a notch from #8 to #9.
Other shifts downward on the U.S. list included the disappearance of two health care sector companies from the top 10 – Baxter (#4 to #18) and Johnson & Johnson (#6 to #36). Energy company Sunoco, dropping 139 spots from #192 to #331, experienced one of the greatest slides over the past year, as did Caterpillar, which fell 108 spots down to a midpack position at #252.
Next page: Financial sector leads global rankings
The top-ranked companies in Newsweek's global company list was dominated by financial and IT sector companies. Four financial companies and three IT companies were included in the top 10.
Brazil’s Santander Bank moved up 16 slots from its 2011 ranking to its #1 spot this year, and was followed by Wipro, an India-based IT company. Rounding out the top three was Bradesco, another Brazilian bank.
Santander, the largest private microcredit bank in Brazil, operates in 600 communities and holds a portfolio of the equivalent of 2 million tons of CO2 through Emission Reduction Certificates and Emission Reduction Units, according to Linda Murasawa, the head of sustainability for the company. It also is involved in more than a dozen sustainable-energy projects, including capturing energy from methane produced in coal mines, as well as wind power in China, Thailand and Brazil. Santander’s Spanish division was ranked #16.
In contrast, one financial institution, the Bank of China, had one of the greatest falls in the ratings. It slid down 142 spots over the last year to land at #234 in 2012.
As with the U.S. rankings, tech companies performed well in the global rankings, with IBM ranked at #4, and Germany’s SAP rising 12 spots over the past year to come in at #8.
Peter Graf, SAP’s chief sustainability officer, reflected that his company’s performance was the outcome of several years’ worth of targeted efforts.
“SAP has been on a path to increased sustainability over the past five years which includes changes in the solutions we offer customers, our own internal processes and how we invest in society,” he said.
Target experienced one of the largest gains in the global rankings, moving up 182 spots to land at #164. Hotel and restaurant company Las Vegas Sands jumped 203 places from its straggler position of #443 to #239.
Ian Yarret, the Newsweek editor who oversees the Green Rankings, is pleased with how the process is being received by companies.
"It’s always heartening at the end of the process to see that a lot of companies really do follow this closely," he told GreenBiz.
After each year's rankings come out, he says that companies often seek more information about how they can improve their performance.
"We hear from a lot of companies, many of which are looking to better understand their scores, better understand why they scored the way that they did, and probably most importantly, how they can score better," Yarret said. "And that’s the goal here, to provide them the most useful ranking possible."