Understanding Green Ranking Systems
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Corporate sustainability rankings and indexes are becoming increasingly popular tools for comparing the sustainability performances of companies across different industries, sectors, and (in some cases) countries. These ranking systems are important for informing stakeholders, fostering employee and executive pride, and prividing a tangible source of feedback and direction to inform future decisions.
But ranking companies of many sizes, industries, and backgrounds is challenging. It provides a very uneven ground for comparison, and inevitably leads to discrepancies across different indexes. Knowing the methodologies behind these major ranking systems is key to understanding how your company can climb the rankings.
1. Dow Jones Sustainability Index: Comprised of multiple separate indexes, the Dow Jones program, launched in 1999, tracks the financial performance of leading sustainability-driven companies. DJSI’s criteria is broken down into three separate dimensions — economic, environmental, and social — with a “weight” assigned to a number of sub-criteria.
2. Newsweek’s Green Ranking of America’s Biggest Companies: Initiated in 2009, Newsweek’s Green Rankings was developed in collaboration with three research partners: KLD Research & Analytics, Trucost, and CorporateRegister.com. Measuring the companies by revenue, market capitalization and total employees, the index breaks companies into 15 sectors (Banks and Insurance, Food and Beverage, Health Care, etc.) before consolidating each into the master list. Companies are given a separate score for Reputation Survey, Green Policies and Performance, and Environmental Impact, all of which make up their total Green Score.
3. The Global 100: Developed by Corporate Knights Inc. and Innovest Strategic Value Advisors Inc., the Global 100 was launched in 2005 and is unveiled each year during the World Economic Forum in Davos. The Global 100’s methodology relies on Innovest’s custom four-step process.
“We’ve been conditioned to want rankings,” suggests Kevin Moss, Head of Corporate Social Responsibility at BT Americas. “It starts with our Apgar score at birth and continues throughout our lives as students, consumers and investors. So of course in the sustainability world we want to see companies ranked according to their sustainability goals.”
Submitted by Grant Draper, President of FD Element