Cisco, HP, and Intel Score Highest on Sustainability Reporting

by | Apr 29, 2010

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Cisco, HP and Intel achieved the highest scores among the 200 largest companies in the San Francisco Bay Area (PDF) for communicating their environmental sustainability efforts, according to a report from EcoStrategy Group. Only 25 percent of the 200 companies issued sustainability communications of some kind, although reporting rose to 60 percent for the largest companies with revenue of $1 billion or higher.

The report, “Trends in Sustainability Reporting: A Close-Up Look at Bay Area Companies” (PDF), rates the environmental sustainability communications of the largest 200 companies in the San Francisco Bay Area. It includes an analysis of what constitutes good reporting as well as a summary of best practice recommendations from leading companies.

EcoStrategy Group rated the companies on 14 attributes of which four — materiality (most significant sustainability issues for the company and its stakeholders), stakeholder inclusiveness, target setting and tracking and completeness– were given the greatest weight. Other attributes include balance, accuracy, reliability, comparability, clarity, timeliness, context, a statement of management commitment, and coverage of supply chain and end use impacts.

One finding shows that a lack of standards around sustainability reporting gives companies tremendous flexibility in how they report their sustainability efforts. Some like Adobe will focus on buildings while others like Apple will focus on the environmental footprint of their products.

There are several good reasons why Adobe, for example, reports on its “green” buildings. The software maker recently installed 20 wind turbines atop a parking garage at its San Jose, Calif., headquarters, which is expected to generate up to 50,000 kilowatt hours of electricity annually. In 2007, the company spent $1.4 million on energy-efficient building upgrades.

Apple, on the other hand, focuses on providing environmental reports on its newest products, though it has fought off shareholder calls for the company to establish a “sustainability” report on the company’s environmental policies and the impact of climate change on its business.

Quality of communications also varied with even the top communicators earning only 82 out of a 100 point scale.

The report also reveals that technology companies do a better job of communicating their sustainability efforts than those in the services sector. Almost a quarter of the technology companies scored in the top tier (top quartile) of the rankings, while about 70 percent of the services sector companies scored in the bottom tier (bottom quartile).

EcoStrategy attributes the discrepancy to several factors. As examples, companies in the technology sector may have a larger environmental footprint than companies in the services sector, and they may be required to comply with U.S. and California Environmental Protection Agencies hazardous materials regulations, as well as global regulations.

The report provides several recommendations to help companies do a better job of sustainability reporting. These include gaining management commitment, understanding stakeholders, benchmarking your company’s reporting and creating a reporting roadmap.

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