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IBM, Tesco and Dell Receive Top Scores in First-Ever Ranking of Consumer & Tech Companies on Climate Change StrategiesSubmitted by: Sarah Cohn, Communications

Today Ceres and the Investor Network on Climate Risk published a study, authored by RiskMetrics Group, titled, Climate Change and Corporate Governance: Consumer and Technology Companies. The report is the first comprehensive assessment of how 63 of the world's largest consumer and information technology companies are preparing to deal with the challenges and opportunities posed by climate change. The report spans 11 industry sectors: Apparel, Beverages, Big Box Retailers, Grocery & Drug Retailers, Personal & Household Goods, Pharmaceuticals, Real Estate, Restaurants, Semiconductors, Technology and Travel & Leisure.

While progress is being made, consumer and technology companies still have more to do in confronting the business challenges posed by climate change. With millions of customers and massive operations and supply chains, consumer and technology companies face broad impacts from climate change, whether from higher energy costs due to emerging climate regulations or growing global demand for products that use less energy and contribute fewer greenhouse gas (GHG) emissions.

The Ceres report found that select companies in various consumer and technology sectors are responding to the risks and opportunities presented by climate change, primarily by setting GHG emissions reduction targets, boosting energy efficiency efforts, expanding renewable energy purchases and integrating climate factors into product design. But the report found that many other companies are still largely ignoring climate change, especially at the board and CEO level. For example, only 11 of the 63 companies have their boards receive climate-specific updates from management, only seven of the CEOs among these firms have taken leadership roles on climate change initiatives and none of the companies have linked C-suite executive compensation directly to climate-related performance. The mixed performance was evident in the report's final scores.

Using a 100-point scale, the three highest scoring companies were IBM, UK-based grocery retailer Tesco and Dell, with 79, 78 and 77 points, respectively. More than half of the 63 companies scored under 50 points, with a median score of 38 points.

The scoring methodology behind the report utilizes a Climate Change Governance Framework, developed by RiskMetrics, and which is comprised of 14 indicators to evaluate five main governance areas: board oversight, management execution, public disclosure, emissions accounting and strategic planning. For this report the framework has been adapted to highlight companies' climate change performance in three key areas particularly salient to the 11 sectors reviewed: energy efficiency and renewable energy; product design and promotion; and supply chain management. Individual scores are based on a 100-point scoring system.

To access the full report and key findings, please visit here.

Full post as published by Institutional Shareholder Services -- Corporate Governance Blog on December 11, 2008 (boomark / email).