IBM Tops US Companies in Newsweek's 2011 Green Rankings

German insurer Munich Re topped Newsweek’s Green Rankings this year, followed by US-based IBM.

The rankings rate the world’s largest corporations on environmental performance.

The top five companies globally are: Munich Re, IBM,  National Australia Bank, Bradesco, and ANZ Banking Group.

US companies trail in sustainability, according to the rankings. After IBM, the next US company is #15 on this list – Hewlett Packard. The top five US companies are rounded out by Sprint Nextel, Baxter, and Dell, all of which are in relatively low impact industries in term of environmental performance. Office Depot is the only retailer to make it into the U.S. top 10.

Newsweek points out, "As government efforts slow, our annual rankings show which companies are still carrying the eco-mantle."

The hundreds of companies Newsweek tracks are collectively responsible for over 6 billion tons of greenhouse gas (GHG) emissions each year, nearly equivalent to all the emissions produced annually by the US.

And that number would be exponentially larger if it included the emissions that result from using the products many of them sell (energy used by the computers that Dell sells, for example). Company leaders are not only reducing their operational impacts; they are making more efficient products – magnifying the effects, says Newsweek.

Here’s how Newsweek describes this year’s rankings:

When Newsweek ran its first Green Rankings two years ago, climate change was high on the agenda. The U.S. House had passed a cap-and-trade bill to put a price on carbon, and the world’s biggest economies were about to make history with an agreement to cut greenhouse gas emissions in Copenhagen.

… Climate science in the U.S. has been politicized by Tea Partiers and others. A skeptical Congress, plus the on-going economic downturn, have made environmental regulations a tough sell. Elsewhere in the world, there is some movement -such as in Australia, which is close to passing a carbon tax – but it’s slow.

While many of the world’s biggest companies wait for government regulation, the top-ranked companies are approaching green projects with increasing tenacity, even in this weak economy. "They have decided this is a long-term play," says Thomas Lyon, professor at the University of Michigan’s Ross School of Business.

For corporate executives, what matters is that waste cuts into profits, and that reducing wasted energy, for example, curbs greenhouse gas emissions while bolstering the bottom line. We face a future in which resources that were once taken for granted-water, land, minerals, fossil fuels-will be limited and costly. Preparing now to succeed in – and profit from – that difficult future could make all the difference.

"We don’t expect a clear-cut policy in the U.S. any time soon," says Mark Vachon, who leads GE’s Ecomagination program (#63 on the U.S. list). "But that doesn’t mean we ought to put our pencils down. In fact, having business lead in this space might be exactly what we should do."

Details on Company Leaders

Munich Re, a German reinsurance company, doesn’t include environmentally damaging projects in its investment portfolio, such as coal plants or gas pipelines, and instead focuses on clean energy projects. It launched the Munich Climate Insurance Initiative to help the industry adapt to the impacts of climate change.

IBM was also on our SB20 List: The World’s Top Sustainable Stocks, which we produced through 2009. Sustainability is an increasingly core driver for IBM’s business. In addition to greening its own and customers’ data centers, it offers  consulting services that help clients reduce their carbon footprint. It’s also a major purchaser of renewable energy and measuring/ managing its footprint for over 20 years.

Office Depot, ranked at #8, is the lone US retailer in the top 10. It’s been improving operations – saving 3,000 tons of wood and $1.5 million a year simply by delivering goods in paper bags rather than cardboard boxes, for instance. More significantly, it provides its largest customers (cities, states, and large corporations) with tools that shows the environmental and financial tradeoffs of their purchasing decisions on everything from copy paper to cleaning supplies.

Here’s the global list of companies.

Here’s the US company list: