Why companies’ emission numbers matter

Information about companies’ climate impact is quickly becoming key to their corporate standings and ability to meet investor and government expectations. For example, the U. S. Securities and Exchange Commission is expected to release a landmark rule in the coming months that will require publicly held companies disclose the risks they face from global warming.

Being part of the solution, rather than the problem, will be key as such metrics roll out.

Consumers, especially younger people, are beginning to care about what companies they buy from are doing to help stop climate change.

“Customers want to identify with brands they feel share their values, and these values are growing in importance for a lot of people around the world,” said Lincoln Bleveans, executive director of Stanford

How companies were chosen

The rankings began with a list of more than 2,000 U. S.- based companies with revenue of more than $ 50 million in 2021. Of those, 700 reported emissions data, making a verifiable ranking possible.

“Sustainability is only one aspect to use when evaluating companies, but we all know it’s becoming more and more important,” said Statista analyst Lisa Abels.

Data and considerations used in the rankings:

Emission intensity: The amount of greenhouse gas the company produced relative to its revenue. This helps put big companies and small companies on a level playing field.

Annualized reductions in emission intensity: Calculated between 2019 and 2021. Companies that showed low reductions were not considered.

Carbon disclosure rating: A measure of a company’s environmental sustainability. These rankings are administered by CDP, a nonprofit that runs a global disclosure system for companies’ environmental impacts.

Other criteria: Some enterprises were excluded if known business practices suggested they couldn’t be seen as a climate leader.

Data used: Scope 1 and 2 emissions, based on the Greenhouse Gas Protocol, the world’s most widely used greenhouse gas accounting standard.

University’s Sustainability and Energy Management program. “For Gen Z, this is literally part of the air they breathe. It’s like buying dolphin- safe tuna, something that’s gone from the edge of the conversation to the center.”

Cutting emissions increasingly makes smart business sense and often doesn’t require companies or people to make huge sacrifices.

“Some people might imagine that in order to solve climate change, we need to stop everything and move into huts,” said Alicia Seiger, managing director for the Sustainable Finance Institute at Stanford’s Precourt Institute for Energy.

“But you can still have your hot showers and cold beers and lower greenhouse gases. It’s a sign of efficiency, innovations and new technology and business models.”