Greenhouse Gas Emissions Rankings—How to use

Sample: All S&P 500 companies
Data: From voluntary GHG reports and mandatory EPA reports.

This website enables you to compare and evaluate a company’s greenhouse gas emissions to help you decide whether to buy from or work for the company. At present, it contains data for 200 of the S&P 500 companies. We are in the process of expanding it to include all 500.

The Greenhouse Gas Emissions Rankings table provides five bases on which you can rank the companies based on raw data provided by the companies. Each ranking serves a different purpose:

1. Company Emissions Ranking. This ranking is based on the total of the companies’ scope 1 and scope 2 emissions. The emissions are reported in metric tons of CO2 equivalent gases (CO2-e). Twenty of the companies did not report scope 1 or scope 2 emissions. We ranked those companies last, in a tie for 81. Scrolling reveals the gigantic differences among the companies in emissions levels. Use the search box to search for the company or companies of most interest to you. A down-arrow in the Exclusions column indicates that the company’s reported emissions don’t include some material amount of the company’s actual emissions, but the company has not estimated the size of that amount. That is, the company admits to under-reporting. Had the company measured all its emissions, the company’s rank may (or may not) have been lower. The fourth column in this set indicates whether the company obtained third-party assurances regarding the accuracy of its numbers and, if so, what type of assurances. “High” or “reasonable” assurances are roughly the nonfinancial equivalent of a financial audit. “Moderate” or “limited” assurances mean the third-party examined the company’s records and didn’t discover anything indicating they were wrong. Either type of assurances are better than no assurances.
Use this ranking to determine which companies are emitting the most greenhouse gases.

2. Intensity Ranking. An airline that carries millions of passengers will produce more emissions than an airline that carries thousands. The ratio of emissions to flights—the emissions per flight—is referred to as a measure of intensity. The “intensity” of greenhouse gas emissions is the amount divided by some measure of production. On this website, the measure of production is revenues. Ranking companies on the basis of their emissions per million dollars of revenues controls for the size of the company.
Clicking on “Rank” under “Intensity Ranking” ranks the companies based on their emissions per million dollars of revenues. Again, we ranked the twenty companies that did not report their emissions last—as tied for 81. To compare how a company’s rank differs between the two measures, place the cursor on the company’s line and then look at its two ranks.
Use this ranking to determine—in a rough sense—how much value the company is producing as it emits a given amount of greenhouse gas.

3. In-industry Ranking. Companies in some industries have much higher emissions because of the nature of their work. For example, most electric utilities are in the business of burning fossil fuels to generate electricity. Their emissions are high. Most financial companies don’t burn fossil fuels. Their emissions are low. Some observers think the most meaningful comparisons are among companies in the same industry. Clicking on “Industry” or “Rank”—the two fields are welded together on Table 1—ranks the companies against other companies in their own industry.
Other observers think that within-industry ranking is myopic. It implicitly assumes that all industries should exist. For example, Edison International ranks first in its industry—Electric Utilities—even though it ranks 62 in scope 1+2 emissions and 60 in emissions intensity.
Because we have data on only 100 companies, we have too few in most industries for meaningful comparison. The situation will improve as we add data for the rest of the S&P 500 companies.
Use in-industry ranking to decide which of the companies to deal with when you’ve already decided to deal with a company in the industry.

4. and 5. EPA Emissions Ranking. These two rankings are by scope 1 emissions and intensity, using EPA data. EPA data are different in three respects. First, EPA collects only direct emissions—the equivalent of scope 1. Second, EPA collects data only from facilities that are major emitters—at least 25,000 metric tons of CO2-e. Seventy of our 100 companies don’t own or operate a facility that emits 25,000 metric tons, so they report no emissions to the EPA. Third, reporting to the EPA is mandatory, so the absence of a company from the EPA dataset is much more likely to indicate that the company has no reportable emissions than to indicate that the company failed to report its emissions.
Comparison of the corporate voluntary Scope 1+2 emissions with the EPA scope 1 emissions yields two interesting observations. First, companies reporting low scope 1+2 emissions are unlike to report any EPA emissions at all. Those that do report considerably lower EPA emissions than Scope 1+2 emissions. Examples are Bristol Myers Squibb, QUALCOMM, and Textron. Second, scope 1+2 emissions should logically be higher than EPA emissions—the EPA doesn’t collect scope 2 or emissions or emissions from facilities emitting less than 25,000 metric tons. Yet several of the largest emitters report more EPA emissions for their facilities than they publicly report for the entire company. Examples are Southern Company, Duke Energy, and American Electric Power. Our guess is that those companies Scope 1+2 are suppressed by the company’s public reporting to equity share boundaries.
Comparison of the EPA emissions data with the corporate emissions data suggests that the EPA emissions data are a poor basis on which to evaluate or rank companies’ greenhouse gas emissions.