Inside the topsy-turvy world of corporate sustainability rankings.
Schwabe, Williamson & Wyatt, Portland’s second-largest law firm, has spent the past few years working assiduously to green its workplace practices. The firm’s offices in the PacWest building feature a battery-recycling station and a coffee-grounds collection for gardeners. The company car is a Prius, bike commuting is encouraged, and the Starbucks in the lobby is stocked with reusable “Schwabe cups.” A sustainability blog allows attorneys and staff to share information, ideas and events regarding sustainability.
Schwabe doesn’t turn clients away for environmental reasons, Bartz says. “It’s kind of like the criminal defense question: Do you actually ask them if they are guilty or not?”
“We care a lot about our community,” says firm president David Bartz. “Part of that is being good to the environment.”
In the office, Schwabe seems to be a model green company. But on closer scrutiny the firm doesn’t fit neatly into the environmentally responsible category. Schwabe’s clients include many businesses and industries often demonized as polluters: paper mills, Atlas Copco, a company that makes mining equipment, General Motors and a pesticide producer.
Two Schwabe attorneys represented Ambre Energy in its bid to build coal export terminals along the Columbia River.
The latter was especially galling to Eric de Place, a researcher for the Sightline Institute, a Seattle-based environmental think tank. De Place contacted Oregon Business requesting we strip Schwabe of its green ranking. A law firm working on behalf of a coal company should not be recognized as environmentally friendly, de Place argued.
Our 100 Best Green list is a green-workplace ranking and does not take into account a company’s product or service. We did not accede to de Place’s request.
Nevertheless, we respected the principle underlying his complaint and were intrigued by the philosophical and practical implications. So two years later, as we were preparing our seventh annual 100 Best Green Workplaces list, we decided to tackle some of the questions surrounding green business awards and ratings systems.
What are the limits of environmental rankings, as well as their potential to drive progress toward a more sustainable economy? Should a company selling a “dirty” product or service qualify for a green ranking or award? We asked companies and nonprofits that have been on our 100 Best Green Workplaces list, as well as green business experts and managers of sustainability rankings, to weigh in on the complexities — and the contradictions.
“We’re in the car business, and normally that
In the world of green business/workplace awards, Schwabe is hardly an outlier. The big three auto companies — Ford, Toyota, Honda — took the top three spots on Fortune magazine’s list of the Best Global Green Brands for 2014. The winners were ranked on the strength of their sustainability initiatives and how the public perceives those efforts.
The 2015 Global 100 list, a ranking of the world’s most sustainable businesses compiled by Corporate Knights, a Toronto-based “clean capitalism” media and research firm, includes eight fossil fuel companies, as well as chemical and mining firms. Global 100 businesses are ranked according to water use, energy use and waste, as well as social and financial criteria, such as the ratio of CEO pay to the average worker’s pay, the company’s safety record and the status of the company’s pension fund.
How did oil companies make the Global 100 list of world’s most sustainable corporations? In part because companies are first compared to others in the same industry, explains Michael Yow, director of research for Corporate Knights Capital. An oil company that is greener than its peers has a better chance of being recognized as a Global 100 member than a company in an industry where green practices are the norm.
“We don’t take any view on a product or service,” Yow says. “We just take every company in the world, then compare them against their peers in the same industry.”
Yow says the primary objective of the Global 100 ranking is to nudge investors toward companies that perform better on environmental metrics. “The way the world works is we don’t have an alternative to oil and gas,” he says. “If oil and gas companies are a necessary evil, the question is: Which one is better than the other? Which one is extracting it better than the other? We speak that way so our audience gets a new perspective to consider.”
“If oil and gas companies are a necessary
At first glance, the Oregon Business 100 Best Green Workplaces lists, past and present, also contain a few head scratchers: auto dealerships, title companies and law firms with clients that aren’t so green. (Our lists have also included organizations that work in the field of sustainability, like the Oregon Environmental Council.)
Like Corporate Knights, we do not take into consideration product or service. Instead, the workplace ranking is based on employee assessment of 10 sustainable workplace practices, such as transportation options, recycling and energy and water use. Employers are also independently scored on 15 questions about their sustainability practices.
We asked a few 100 Best Green Workplace winners how they viewed their ranking and how they might address any apparent contradictions associated with that ranking. Elliott Associates, for example, a commercial real estate company based in Portland, has been on the 100 Best Green Workplaces list three times. The company has also earned Gold Certification from Sustainability at Work, a green workplace certification program offered by the city of Portland. Sustainability at Work certification is based on 15 benchmarks around waste reduction, energy and water use, transportation options and employee training. It does not take into account product or service.
Elliott Associates’ green features include solar panels in its headquarters; employees are also encouraged to commute and conduct property visits by bike. But some of the firm’s business practices are less recognizable as eco-friendly. Like most commercial property managers, for example, the company works with landscapers that spray pesticides. The company was at the center of the 2013 bee die-off at the Wilsonville mall after a subcontractor sprayed the insecticide Safari on 55 blooming linden trees in a parking lot managed by Elliott Associates.
After the incident, the Oregon Department of Agriculture fined both the landscaping company, Collier Arbor Care, and the individual pesticide sprayers. Elliott Associates was neither fined nor found to be negligent. Nevertheless, several readers contacted us, irate at the thought that a company indirectly connected to a bee die off was being recognized as a green leader.
Mike Larkin, a senior property manager at Elliott Associates and a member of the company’s green team, does not think his company’s place on the Green Workplaces list is undeserved. He says the firm works with all of its subcontractors — landscapers, janitors, painters — to reduce the use of toxic chemicals. Larkin also says many of the commercial landscapers his company works with are working to green their own processes. Following the Wilsonville incident, Elliott Associates directed its landscaping contractors to stop using pesticides at the properties it manages.
Still, there are limits, Larkin says. Asked if Elliott Associates plans to phase out use of chemicals on the company’s properties, Larkin says no.
“The expectation that everything is going to be diatomaceous earth and happy goodness is not a reality,” he says. Diatomaceous earth, for those who don’t know, is a naturally occurring sedimentary rock easily crumbled into a powder that is sometimes used as an insecticide.
Steve Johnson, spokesperson for the Port of Portland, makes a similar, incremental-improvement argument when defending the Port’s support of a controversial propane export terminal. “We have been extremely discerning when considering recent energy sector cargo opportunities,” Johnson says. “After saying no to coal and ‘not now’ to crude by rail, we are confident that with propane, we are saying yes to the right partner at the right time.”
The Port, a 2014 100 Best Green Workplace, boasts several sustainability features, including a LEED Platinum headquarters and a 65% reduction in energy use across its facilities since 1990. The agency’s pursuit of propane, Johnson says, “does not decrease the need to focus on energy efficiency and conservation but is a complementary approach that will help in the fight against climate change.”
Methodology and transparency
“The expectation that everything is going
Do companies that receive income from business activities related to an anti-sustainable industry or project undermine green rankings? To be sure, some environmental awards programs seem based on dubious criteria, such as green branding and marketing practices. This is de Place’s concern. “On balance ‘green’ lists are probably a good thing inasmuch as they create a positive incentive for good behavior,” de Place said in an email to Oregon Business.
“What I’ve been trying to do is hold law and PR firms accountable to the claims they make about themselves. Many of these firms market themselves as green minded or sustainability focused. Yet at the same time, many are working on behalf of manifestly damaging projects for some of the most environmentally destructive industries on earth, like coal and oil.”
Clarifying the methodology of environmental awards and certification systems can alleviate some of the concerns that arise from green rankings; they can also reinforce their purpose, experts say. “Transparency and accuracy are the key issues in green rankings,” says Desiree Pacheco, a professor of sustainability and management who teaches at Portland State University’s business school. “Once we understand the criteria for the award, we can understand the value — and the limits.”
Yow of Corporate Knights echoes that opinion. “One of the ways we address criticism in terms of an [oil] company ranked high is to make sure the methodology is clearly understood by everyone.” The Corporate Knights methodology, for example, has helped identify oil companies in Scandinavia that have implemented more environmentally sound practices than their North American counterparts, Yow says.
Being too quick to accuse companies in nongreen industry sectors of greenwashing, experts caution, can be counter-productive, because it devalues the importance of incremental improvement in moving the needle toward a more sustainable world.
“In order to achieve the scale, scope and speed of business transformation that’s required by the planet, we need to bring every sector into the conversation,” says Joel Makower, editor and president of GreenBiz, a San Francisco media and research firm. “That includes big, bad industries that aren’t traditionally seen as part of the solution. We can’t limit our kudos to Nike, Patagonia and Aveda. Because what’s going on is much more than that.”
In the United States, buildings account for 71% of total electricity usage and produce 40% of all greenhouse gases. So even a business whose core industry is polluting can reduce its environmental footprint by reducing waste, water and energy use, and by creating a healthier work environment for its employees.
But for that reason, “most green rankings should really be called ‘greener’ rankings,” continues Makower. “They tend to recognize companies that are leaders in their sector, have made significant improvement or have otherwise demonstrated some leadership. That can be from any sector. If you are trying to find the very best companies and only the ones that are inarguably environmentally responsible, it’s going to be a pretty short list.”
Our 100 Best Green companies and nonprofits, conventional and green, sounded that refrain over and over again. “We’re in the car business, and normally that is not something you would put together with being green,” says Brad Preble, president of Carr Auto Group, a 2015 100 Best Green Workplace. But any industry can and should green its practices, Preble says. “It just takes a concerted effort.”
Jen Coleman is the health outreach director for the Oregon Environmental Council, a fixture on our 100 Best Green Workplaces top 10 list. “We believe it’s the responsibility of all sectors of our economy to embrace sustainability and strive for improved practices,” Coleman says. “Even if a business is inherently destructive, there are ways to make it less destructive.”
Indeed, as Makower suggests, green ratings systems are valuable not so much because they identify companies that are green but because they single out companies that are making a good-faith effort to move away from unsustainable practices — be it in the workplace or in business operations, products and services.
In an interview with Oregon Business last year, Mark Stevenson, former CEO of Capital Pacific Bank, a longtime 100 Best Green Workplace, said the bank used the rankings as a benchmark, closely reviewing responses to the survey each year so it could improve practices — and its ranking — the following year. (Capital Pacific was acquired by Pacific Continental Bank earlier this year.)
“If you are trying to find the very best companies and only the ones that are inarguably environmentally responsible, it’s going to be a pretty short list.”
— Joel Makower, GreenBiz
Encouraging green practices. Calling attention to smaller companies and lesser-known industries. Making sustainability a big-tent enterprise. The benefits of green awards programs can’t quite compensate for one confounding trait: They often seem to honor companies that just aren’t that green.
But in the end, perhaps, the paradox is easily unpacked. In 2015 local and global economies are still firmly rooted in fossil fuels and toxic chemicals. In that context, the contradictions embedded in environmental rankings and ratings are a proxy for the contradictions of the world we live in.
We are moving in a clean-energy direction, yet human enterprise today is still powered by oil and gas. Or, as Schwabe’s Bartz puts it: “A lot of people don’t like paper mills. But they still use paper.”
In a “one step forward, two steps back” world, even the most environmentally-friendly companies bump up against the limits of sustainability.
“Patagonia [the outdoor apparel manufacturer] is one of the most innovative, progressive, environmentally activist companies, but their environmental footprint is growing every year as they continue to grow as a company,” Makower says. “Despite their best efforts and true leadership, they are still losing ground. Our enemy is growth, population, consumption.”
If that assessment sounds pessimistic, a reigniting of the go-nowhere economy versus environment paradigm, Makower carves out room for optimism.
“I’ve been in this business 25 years, and I continue to be pleasantly surprised by the entry of new companies doing big things — just as much as I continue to be frustrated by the pace of change. Can you have a good company in a dirty industry? Reasonable minds will disagree on that. If the answer is no, then we are lopping off big parts of the economy from conservation. We need to identify and elevate leaders from every sector.”
Why do oil and car companies routinely show up on most sustainable-company lists? The answer is simple: Environmental rankings, compiled openly and with a clear methodology, are an accurate representation of companies and nonprofits that are charting a path toward a brighter greener future.
Additional reporting by Linda Baker
A version of this article appears in the June 2015 issue of Oregon Business magazine.
Clarification: This article has been amended to reflect the following change. Elliott Associates, a commercial real estate firm, was neither fined nor found to be negligent in the 2013 bee die-off mentioned in the article. Following the incident, the company directed its landscaping contractors to stop using pesticides at the properties it manages.
In the spirit of continuous improvement, Oregon Business is adding a new question to its 2015 100 Best Green Workplaces survey: whether greening the workplace leads to greening products and services. Jana Gastellum, climate program director at the Oregon Environmental Council, suggests another addition: a screen on company lobbying dollars, campaign contributions and policy stances.
“It’s easy to put out green-tinged PR but then try to tank regulations or new sustainability policies in Congress or state legislatures, which is more out of the general public’s eye,” Gastellum says. She cites Neste Oil, a Finnish firm ranked as one of the Global 100, as a company that walks the talk. “They’ve diversified their investments into actually producing renewable diesel, a much cleaner, lower-carbon diesel equivalent. A lot of other oil companies talk about investing but don’t always follow through.”