One of the surprising findings to come out of an international study on climate change practices at corporations was that among the top technology firms, consumer favorite Apple Inc. came in last.
And it didn’t just come in last by a slim margin, there was an iceberg-sized gulf between it and industry leader IBM. Out of a score of 100, IBM came in on top with 79 points, while Apple was at the bottom of the technology sector – and near the bottom of most other sectors – with a score of just 28.
The study, conducted by RiskMetrics Group on behalf of Ceres, a coalition of investors, environmental groups and public interest organizations, analyzed climate change governance practices at 63 of the world’s largest retail, pharmaceutical, technology and other consumer-facing companies.
Companies scoring the highest rankings in the study were IBM, British grocer Tesco, and Dell, with 79, 78, and 77 points respectively. More than half of the 63 companies in the study scored under 50 points, with a median score of 38.
Technology companies fared better than the overall group in terms of their leadership on the climate change front, the report said, particularly in regard to making their operations, data centers, and product lines substantially more energy efficient. It highlighted IBM’s conservation energy programs which saved the company nearly $20 million in 2007.
The technology portion of the Ceres report can be found here.
Following IBM and Dell in the rankings, were Sun Microsystems at 63 points, Hewlett-Packard 62, Cisco Systems 55, and Canon 52. Apple, as mentioned, was far down at the bottom with 28 points.
Apple has certainly done a good job of portraying itself as a green company, in fact, in May of 2007 chief executive Steve Jobs laid out the company's plans to make its products as environmentally friendly as possible with its “A Greener Apple” plan. Among the steps in that campaign was a commitment to eliminate two toxic chemicals from its products – polyvinyl chloride and brominated flame retardants – by the end of 2008.
So why then did Apple fare so poorly in the Ceres study?
For starters, CIOZone contacted Apple to comment on the report, but the company has not yet responded. But by-and-large the company scored poorly because it has not set (or disclosed) emissions targets and it has not established a chain-of-command for responsibility to the board of directors.
According to Apple’s corporate Web site, more than 95% of the company’s carbon footprint comes from its products. In October of 2008, Apple for the first time released the estimated carbon footprints for each of its main product lines. However, the Ceres report noted that Apple has not yet conducted a comprehensive greenhouse gas emission inventory or set reduction targets for its operations.
On board of directors oversight of environment issues, Apple scored zero points. (IBM scored 8 points and Dell 6.) The Ceres report noted that Apple received a shareholder proposal asking that a board committee be established to address environmental sustainability issues. The board of directors voted against the proposal, and the company stated in its 2008 proxy statement that it does not believe a board committee is “an effective way for the Company’s practices and goals to continually evolve and improve in response to changing conditions.”
Apple also took hits in the scoring for not identifying associated areas of research and development, for not having an outside verification of its CO2 emissions, and for not identifying employee training on the issue.
It may very well be that Apple does have policies and programs in place to address many of the issues raised by Ceres, but the point is it does not publicly identify those programs. And without public disclosure, it cannot be held accountable.
The Ceres report no doubt has many flaws, but just the fact that it scores companies and names names, should spur most boards of directors into action. Apple, for one, risks damaging the confidence consumers have placed in its corporate brand.
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