2012 Global 100 Greenwash

Corporate Knights has announced its 2012 list of the “Global 100,” its annual ranking of what are ostensibly the world’s most sustainable companies. And once again the list is deeply misleading.

The list is topped by pharmaco Novo Nordisk, Brazil’s Natura Cosmeticos, Norwegian energy company Statoil, the Danish biotech company Novozymes, and a Dutch company called ASML Holding, a manufacturer of photolithography machines used in the semiconductor industry. Some will surely express surprise at the list — after all, none of these companies is in an industry known for being squeaky-clean. But that’s not the real problem.

The real problem lies in Corporate Knights’ methodology. Like all similar rankings, this one has to choose some criteria. And the devil is in the details.

Here are their criteria used to determine the Global 100 — a sustainability ranking — for 2012:

#1. Energy productivity
#2. Greenhouse gas (GHG) productivity
#3. Water productivity
#4. Waste productivity
#5. Innovation Capacity
#6. % Taxes Paid
#7. CEO to Average Employee Pay
#8. Safety Productivity
#9. Employee Turnover
#10. Leadership Diversity
#11. Clean Capitalism Paylink

The problem is that more than half of these criteria — #5 through #10 — have nothing to do with sustainability. I do realize that the exact definition of “sustainability” is up for grabs at this point, and many people interpret it quite broadly. And yes, if you use your imagination and squint your eyes a bit, I guess you can conjure up a connection between “Leadership Diversity” and sustainability. But it’s a stretch. I mean, sustainability has something — something — to do with environmental issues, right?

One sustainability consultant who shall go unnamed recently told me that “sustainability doesn’t mean ‘sustainability’ any more — it just means all the good stuff that business does.” The problem is, that’s not what the term conjures in the mind of the public, the consumers of the headlines a list like this provokes. When they hear “sustainable” they think “green.” So a sustainability ranking that is only partly based on environmental performance fails in its basic functions, namely to reward companies for their green behaviour, and to educate consumers about which companies are performing well on issues that are important to them.

5 comments so far

  1. Sebastian Olényi on

    Exactly! Could not have said it any better. And this is what is at the core of the sustainability issue: Which are the right criteria and priorities? This is my PhD topic – follow on @biosustainable and or on http://www.biosustainable.net to learn more 😉
    BTW: The Dow sustainability index is not that much different in its choice of criteria…

  2. Barbara Kimmel on

    Chris- you hit the nail on the head when you said that different terms mean different things to different people, and that’s why some of these rankings may be misleading and confusing. This is a perfect example. Corporate Knights is taking a broad view of the definition of sustainability beyond the environment and across the entire business- looking at all the good stuff, as you described.

    Our model examines drivers of “trustworthy business,” a term that may be more universally understood, and have broader appeal than “sustainability, CSR or governance.” It crosses all the ESG silos and also includes financial stability. It looks at the overall health of the company, and identifies the ailing body part, so to speak. No company is perfect. The highest ranked scored an 80/100.

    We just finished our analysis of Top Companies by Sector.

    Click to access SectorPressRelease.pdf

    Barbara Kimmel, Executive Director, Trust Across America.

  3. […] saw the new Global 100 Ranking, which is ostensibly a sustainability ranking. (See my blog posting here.) Why cranky? Because over half of the criteria used to arrive at that ranking have nothing to do […]

  4. […] are essentially the same criteria they used (and which I critiqued) last year. The only difference is that they’ve added the bit about “Pension Fund […]

  5. […] für Interpretation. Hat Nachhaltigkeit zwangsläufig etwas mit der Umwelt zu tun? Auf jeden Fall, schreibt Chris MacDonald, ein Experte für Wirtschaftsethik. Im Ranking werden die Konzerne allerdings auch an Werten […]

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