Are ‘Green’ Corporate Rankings a Scam?

money handshake imageRankings, ratings and scorecards are often only vehicles for environmental groups to draw attention to their cause (as with Greenpeace), and more often than not they are given legitimacy – even when they conflict with other likeminded groups – since a sympathetic media likes to amplify their agenda.

And then there are the operatives who just want to make a buck off the “Green” scam with the creation of faux rankings. Such appears to be the case with GreenBusiness Works, which last week published its 2011 “Southeastern Corporate Sustainability Rankings.” The Atlanta-based group is the creation of a marketing and communications guru named Stephanie Armistead, who years ago converted her agency to one that focuses on the liberal priority of “Corporate Social Responsibility.”

The rankings showered love on companies that any business consultant like Armistead would want as clients. GreenBusiness Works pegged United Parcel Service as the top company and a “Sustainability Champion.” Other recognized corporations – which had to be headquartered in one of six Southeastern states and have a minimum market capitalization of $100 million to qualify for consideration – included Coca-Cola, Duke Energy, Hanesbrands, Southern Company, Fedex Corp., Office Depot, Nucor, and Progress Energy, all of which were praised as “Sustainability Leaders.”

To illuminate the illegitimacy of the rankings, three (Southern, Duke, Progress – the latter two are merging) are electric utilities that have received heavy criticism from environmental groups for their heavy use of coal and nuclear to generate power. Nucor heavily impacts the environment with its steel, metals and mining businesses, and both UPS and Fedex spread carbon dioxide emissions across the globe on a daily basis via their airplanes and delivery trucks.

Nevertheless UPS soaked up the meaningless accolade. “This award recognizes the growing importance of sustainability as a leadership criteria for corporations,” said UPS Chief Sustainability Officer Scott Wicker. “We are honored to know that our efforts in energy conservation, socially responsible business practices, volunteerism and transparent reporting are being recognized by the Southeastern Corporate Sustainability Rankings.”

GreenBusiness Works says the criteria used to evaluate the businesses came from CRD Analytics, a “leading provider of independent sustainability investment analytics.” The proprietary methods utilized by CRD apparently disregard actual greenhouse gas and pollutant emissions, as well as the opinions of environmental activists. They do, however, claim to take into account factors such as “environmental performance,” product responsibility, community, human rights, diversity and opportunity, and employment quality, as well as “governance performance indicators.” However, no descriptions of what makes each aspect positive or negative is provided.

More likely the Greenbusiness Works assessments are based upon the business aspirations of Armistead and the sponsors of her rankings. After all, according to GreenBusiness Works:

…the long-term vision for the Rankings is for it to be converted into an investable index with a portion of the profits donated to a Southeastern region non-profit organization (perhaps GreenBusiness Works?)….

Proud sponsors and supporters of the second annual Rankings include the following environmentally-conscious companies: Reznick Group, Servidyne Inc., Grubb & Ellis, ROOKER, Sustainable Options, JustMeans and Georgia Trend. “The firms sponsoring this year’s Rankings were invited to participate because of the resources they offer to companies interested in advancing sustainability,” remarked Armistead. “Brokering relationships between entities adopting sustainability practices and those with the resources to support them is a key initiative of GreenBusiness WORKS. This year’s sponsors provide important resources for any organization interested in accelerating their work in sustainability.”

How’s that for transparency? In other words, Armistead drafted these co-sponsors precisely because they cater to the sustainability efforts of the corporations whose business they hope to win. Are these businesses also Armistead’s clients? What an advocate!

For example, Reznick Group is an accounting, tax and business advisory group, with a specialty in renewable energy tax credit services. From their Web site:

Federal energy tax credits incentivize organizations and entities to finance renewable energy project development. With the new administration in Washington, and a continued focus on the environment, we believe there are many new financial opportunities for the renewable energy industry.

Reznick Group’s renewable energy accounting and energy tax consulting professionals provide business advice to clients on the most efficient means of financing and capitalizing renewable energy projects. In doing this, we perform assurance and tax consulting and compliance work related to a variety of corporations, partnerships and service arrangements that stand to benefit from federal renewable energy tax credits.

Another sponsor of the rankings, Servidyne Inc., “helps businesses reduce costs by cutting energy consumption and enhancing the operating and financial performance of their existing buildings.” Justmeans claims it “has become the leading platform and ecosystem for the growing ‘sustainable business’ industry.” And GreenBusiness Works itself offers “our instructional designers and training consultants work directly with the clients subject matter experts to develop customized, cost effective training solutions to satisfy short and long term, environmentally sustainable business objectives.”

Wouldn’t any of these consultancies – even CRD Analytics, an investor advisory firm that specializes in sustainability – just love to win contracts with the likes of UPS, Coca-Cola, or Duke Energy? Perhaps these rankings are just the beginning of a beautiful friendship. Meanwhile, beware of self-authorized Green groups who praise corporations for their environmental magnanimity – there is probably a deal to be struck in the background.

Paul Chesser is associate fellow for the National Legal & Policy Center and is executive director for American Tradition Institute.