A Rollins College colleague stopped by yesterday to tell me about his research relating sustainability to corporate success. He has shown that “greener” companies yield higher net profits than their less-ecologically responsible competitors. But who determines each firm’s water usage, carbon emissions, workforce well-being, recycling levels, and a score of other sustainability factors? The new Businessweek (Dec. 4,2011) tries to address who the arbiters of sustainability are with its article “The Race to Decide Who’s Greenest”.
It turns out that investors and the public are demanding detailed information on metrics that define sustainability. And in response, scores of rating outfits have sprung up, each trying to be the judge of who’s really green. One of the largest, 
Global Reporting Initiative (GRI), provides over 100 metrics on such areas as workplace safety, toxic waste spills, and recycled materials. But GRI does not audit company survey replies and does not judge performance. Newsweek rates companies on their commitment to the environment. Dow Jones publishes an index of “most sustainable companies”. And the Ethisphere Institute ranks the “World’s Most Ethical Companies”.
In 2000, there were 21 such raters. By 2010, that number swelled to 108. IBM’s environmental affairs chief says: “It’s our collective American culture to rate. Look at Dancing with the Stars“.
Wal-Mart has created its own Sustainability Consortium and index for tracking its 1,000’s of suppliers’ green efforts. It is creating standards for cotton towels, TVs, yogurt, and scores of other products. Each product has its own specific set of metrics. “We want to make sure we are measuring the right things”, says Wal-Mart’s director of sustainability.
The bottom line: With more than 100 groups ranking companies on sustainability, is it time for global reporting and assessment standards?
Discussion questions:
1. How is sustainability good for operations management?
2. Why do OM managers need a “green” index?