• by Michael Martin , December 8, 2010

The 2010 ratings are out from Climate Counts, a nonprofit organization that tracks corporate commitment to the environment. Here's the good news: The world's best companies are measurably lowering their impact on global climate change. What's more, they're doing it through systemic change that lays the foundation for sustainability as business.

Last week, the Berkeley Electronic Journal of Economic Analysis & Policy released a paper titled, "The Impact of Climate Change Information: New Evidence from the Stock Market." The authors studied the organization's initial ratings in 2007 and found that the scores had "statistically significant and large impacts on stock market returns."

Neither of these events garnered front-page headlines, and probably only Green devotees (I serve on the nonprofit's board) actively monitor such releases. But make no mistake: This is important news. The net effect: Companies that are actually committed to environmental consciousness are turning up the dial on participation, motivated by scoring systems that ultimately equate with financial market value. The scoring systems inform the public and provide ordering principles for companies serious about softening their footprints.

Climate Counts rates nearly 150 top global brands in 16 consumer categories. The corporations are scored against 22 specific criteria designed to gauge how they measure their climate footprint, reduce their climate impact, support (or block) climate policy initiatives, and engage with consumers transparently about their climate efforts. This year's ratings are available at www.climatecounts.org, the Climate Counts Facebook page, in a pocket guide, and in a free iPhone app. The scores also factor into such other rating systems as Newsweek's Green Rankings and the Good Guide.

The scores are on a scale of 0 to 100. Low-scoring companies are, in the parlance of the organization, "stuck" on the issue of climate change; high-scoring corporations are "striding" in reducing their CO2 footprint. The middle of the pack is considered "starting" on a pathway to deeper engagement on climate change.

Of the 90 companies whose updated scores were announced Tuesday, 73 (81%) improved their scores this year. What's more, the average scores rose over six points to 50.1. Since the organization first published scores in 2007, the average company score has improved 67%, from 31 to 50.1 points. If you count the ratings as a kind of Global Warming Industrial Average, industry is making real strides.

The Striding companies with the highest scores for their industry sectors are Nike, Microsoft, General Electric, HP, Stonyfield Farm and Unilever (tied for the lead in food products), Anheuser Busch InBev, Starbucks, L'Oreal, Bank of America, Southwest Airlines, Marriot Hotels, and UPS. The companies that made the biggest leaps forward were PNC Financial Services, Capital One, Alaska Air, Clorox, and CBS.

The companies at the bottom of their industry's ratings are Liz Claiborne, Amazon.com, Viacom, Apple, ConAgra, SABMiller, Wendy's Arby's Group, Avon, SunTrust, Skywest, Carlson Hotels and FedEx. For these clearly stuck companies, researchers in the recently published academic study have already sounded the alarm. They wrote: "Poorly rated firms' market valuations fell by between 0.6 and 1.6%, or somewhere between $2.7 million and $7.2 billion in total after the ratings were released."

As I travel around the country speaking on this topic, I'm continually astonished by the number of businesspeople who say that global warming "isn't man-made" or "just isn't my problem." Yet, virtually 100% of the world's climate scientists accept that man-made emissions make an impact on our environment.

To truly move the needle on climate change, businesses have to "own" their contribution to global warming. Striding companies are evolving into environmental action as integral to corporate innovation, while the stuck companies are caught in compliance mode. As more people see and react to their scores, these companies will likely find the incentive to up their ante.

By using the lever of capitalism to redirect the energy of capitalism (or, turn capitalism on itself), scorecards on environmental leadership are helping motivate sustainable change in corporate practices. They're not about campaigns; they're about constructs for consciousness as a pillar of corporate strategy and operations. For the most part, business now appears to be more environmentally enlightened than it gets credit for.