Question and Answer with the Council President: Analysis of Newsweek’s Green Rankings

This week, Newsweek unveiled its inaugural green rankings of businesses in America. Council on Competitiveness President Deborah Wince-Smith asked Newsweek editor Kathleen Deveny about the survey.

Question: Why did you undertake this?

It's the first of its kind -- it's not an anecdotal rating, it's a data project we worked on for over a year. Looked at policies, did a reputational survey among experts, not an anecdotal survey that might reflect marketing more than actual performance.

Question: HP was number one. What made them number one?

Different industries have different footrpints -- we had to work out a way to compare apples and oranges. We wanted to give credit to companies who were creating good policies. It's not perfect, but we felt it was the fairest way to do it.

Question: What went into the impact part of this survey?

We looked at greenhouse gas emissions,  water use, solid waste disposal, acid rain emissions. Number of employees, water use, solid pollutants -- we tried to make it as comprehensive as possible. We relied on True Cost as a data partner -- most comprehensive job of compiling data. We considered energy and electricity use.

Question:  We've talked a lot about energy efficiency. Was energy productivity part of the impact?

It's a difficult thing to measure. We put it in the overall assessment -- how companies use electricity in their own operations.We looked at leadership efforts to reduce energy use and looked at energy use in the products they produce. Intel and HP are looking to reduce the energy impact of their products -- that can have a huge impact over time.

Question: Efficiency in aerospace is the next frontier. On the policy side, the people surveyed were energy experts. How many of these major corporations have really elevated a sustainability officer to a high level in the company?

This is anectodal, but a fair number of them have -- especially in the top 100. They were the most leading-edge -- there were sustainability leaders at almost all of those companies. Many of them have elevated those people -- that's a dramatic change from even five years ago. Most of the smartest and forawrd-looking companies realize that thre US might require reporting this data, and that's hard. So it's becoming a prioroty in companies who realize that polluting affects their bottom line.

Question:  On the reputation side, we heard about the hearts and minds of consumers with a reputation. Did you find that companies that did well on impact weren't as good on reputation, or did it even out?

The top two in reputation were Walmart and GE. They've done an excellent job of getting themeselves out. It's not greenwashing, they'be both had major pushes toward sustainability. GE has changes the way the company performs -- they've made a change in production. They've moved the needle very dramatically in a short span of time. Some companies that did very well on impact didn't fare as well on reputation -- HP for instance. That indicates there's an opportiunity for those companies to get their story out a little better. Some of the greenest companies were focused on doing the work, not telling the story. We think we've hit a tipping point -- environmental impact is important to consumers, as we're seeing.

Question: Walmart's new product standards -- it's going to be transformational. To have the carbon footprint label on products like we have calorie labels. How will that affect their supply chain?

It reflects consumer demands. It'll have huge impacts on their supply chain. It's very difficult to measure the impact of a supply chain. We tried to recognize companies that have leadership on their supply chains. Nike is doing that, Starbucks is doing that. It's going to become a bigger issue.

Question: Environmental safety is another factor. DuPont set a standard in safety for their workers, and it's led to innovation and a talented workforce. They've set the standard. There's a parallel to how sustainability will change things.

Companies that take responsibilty for the lifecycle of the product will emerge as leadership. HP buys back its old products and sells the metal at a profit.

Question: As we approach Copenhagen, there's an impact on sustainability and jobs. If we don't have a gloabal commitment, we'll have jobs move to different places. This is a complex issue.

And some companies are making money on that. Marathon Oil is capitalizing on it by reducing CO2 emissions in Equatorial Guinea at its plants there, working with companies in developing countries to become more sustainable and turning that into a business.

Question: There's also a university side to this. How are you going to continue this survey?

We want to include international companies first, but there's a lot of green marketing in college recruitment, and it would be interesting to see.

Audience questions:

James Jones: What have you heard are the greatest challenges that these ranked companies face to advance further?

Companies don't have it easy. Reporting this data is hard, there's no standard way to get this data. We hope this ranking will encourage disclosure, which is the start to improvement. If we can't measure progress, it's hard to improve.

Larry Weber: How effective are thetop corporations at communicating this through social media?

We didn't cover that, but there's a definite gap between the top companies and the perceived top companies.

Question: What hapens to a company that claims it's green but the data don't support that?

Larry Weber: We need honesty and transparency -- it's the only way to win favor with consumers. Reputation is connected to brand.

We might do a general population survey as well to see what trhe average consumer thinks. There's a definite danger in greenwashing, because it creates enormous hostility.

Question: Small and medium-sized businesses. There aren't a lot on the list.

We didn't focus on them, because we had to start somewhere.

Question:  For small businesses, could this be a burden?

There are some real issues there, I think. The government needs to consider this.

Question: Looking forward five years, what would you like to see?

All 500 of these companies reporting greenhoues gas emissions in a standrad way. I want to include international companites. I want a contoinuin g debate -- I want this information to become more public. We've reached a tipping point in corporate America.

 Coming up: Secretary Gary Locke, and a presentation by Gallup CEO James Clifton.

— Sarah Spooner

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