Newsweek Green Rankings 2010 FAQ

Will Newsweek be doing this annually?
Newsweek will produce this ranking annually. The first Newsweek Green Rankings were published in September 2009. The 2010 rankings will expand to include the largest companies around the world.

What is unique about this ranking?
The Newsweek Green Rankings are the first effort by a media organization to rank companies based on their actual environmental footprint, as well as their environmental policies and reputation among their peers and environmental experts. Most green lists are anecdotal—Newsweek's is the result of a comprehensive, year-long database research project supported by three leading research firms and an advisory panel of experts.

Who are Newsweek's research partners?
Newsweek's partners on this project are the world'sleading players in environmental research. RiskMetrics Group, the lead partner, provides risk management and corporate governance products and services to participants in the global financial markets. They created the Green Policies Score by analyzing corporate environmental policies, initiatives and response to challenges. Trucost hosts the world's most comprehensive data on corporate environmental impacts. They calculated each company's Environmental Impact Score, based on over 700 metrics, including Greenhouse Gases (GHGs), water use, waste and acid rain emissions. is the primary reference point for corporate responsibility (CR) reports and resources worldwide. They conducted an extensive reputational survey of CEOs, environmental officers, and academics. ASAP Media serves as Newsweek's editorial partner on the green rankings.

What is the methodology used to create the ranking?
Newsweek's goal is to assess each company's actual resource use and emissions and its environmental policies and strategies, along with its reputation among its peers. The Newsweek GREEN SCORE for each company is based on three components:

The ENVIRONMENTAL IMPACT SCORE (EIS), based on data compiled by Trucost, is a comprehensive and standardized quantitative performance measurement that captures the total cost of all environmental impacts of a corporation's global operations. Over 700 variables are summarized in the EIS. This figure is then considered in relation to a company's annual revenues, so that companies of all sizes and industries can be compared.

Four of the major elements that contribute to the overall EIS score are: greenhouse gas emissions, water use (including direct, purchased and cooling), solid waste disposed, and acid rain emissions, all considered in relation to a company's revenue. Trucost data is based on standardized, company-reported data, fuel/resource use, and production-based company estimates.

Additionally, separate columns on toxic waste emissions and emissions normalized against a company's annual revenues are included. Emissions data is derived from the Toxic Release Inventory, a U.S. Environmental Protection Agency database of information on toxic chemical releases and waste management activities.

The GREEN POLICIES SCORE (GPS), derived from data collected by RiskMetrics, reflects an analytical assessment of a company's environmental policies and performance. Its scoring model captures best-in-class policies, programs and initiatives, as well as challenges companies face for poor environmental performance, including community protests and sanctions, regulatory actions and lawsuits.

The main elements incorporated in the GPS score are: environmental and climate change policies and performance, pollution policies and performance, product impacts, environmental stewardship and environmental management.

The REPUTATION SCORE is based on an opinion survey of corporate social responsibility (CSR) professionals, academics and other environmental experts who subscribe to CEOs or high-ranking officials in all companies on the Newsweek 500 list were also invited to participate.

The survey asks respondents to rate companies as "leaders" or "laggards" in key environmental areas, such as green performance, commitment, and communications. In 2009 the opinion survey, which was done exclusively for Newsweek, went out to 13,000 users, of whom 6,600 were located in the U.S. and 6,400 were based internationally.

How is the Newsweek Green Score calculated?
Each partner scores a company according to their specific methodologies, and then converts the results to Z-scores, a widely accepted statistical technique that measures how a firm compares to the average score of the group. In 2009 the overall Newsweek Green Score was calculated as the weighted sum of the three component Z-scores: 45% for the Environmental Impact Score, 45% for the Green Policies Score, and 10% for the Reputation Score.

Who determines the approach to the methodology and weightings?
The methodology and weightings are created by Newsweek research partners RiskMetrics,Trucost and in consultation with an independent advisory panel. For 2010 the panel's members include:

John Elkington, Founder and Executive Chairman,Volans

Dan Esty, Professor of Environmental Law and Policy, Yale University

Marjorie Kelly, Senior Associate at Tellus Institute and co-founder and former editor of Business Ethics Magazine

Thomas Murray, Managing Director, Corporate Partnerships Program, Environmental Defense Fund

Wood Turner, Executive Director, Climate Counts

David Vidal, Global Corporate Citizenship Research Director, The Conference Board

Deborah Wince-Smith, President and CEO, The Council on Competitiveness