1. Getting a Grip on Context:
Initial Findings of World's First
Science-Based Approach to
Corporate Sustainability Ratings
New Metrics of Sustainable Business Conference
September 24, 2013 (v2)

2. For Climate Counts – Why Context?
100
0
4 Pillars:
Measure
Reduce
Report
Policy Stance

3. Great progress – but is it enough?
81% of the world’s 500 largest public companies listed on the
Global 500 engage with CDP to enable effective measurement
of their carbon footprint and climate change action.
Company scores have improved 60% from 2007 on
the Climate Counts scorecard.

5. Are we sustainable?

6. Enter Context-Based Metrics
•
In late 2012, CC was
approached by Center for
Sustainable Organizations
(CSO) with a proposal to
enhance CC’s methodology
•
Agreed to pilot a new form of
ranking that would be contextbased (i.e., that would rate
corporate emissions against
science-based standards)
•
World’s first context-based
sustainability ranking in the
capital markets!

7. Brief Introduction to ContextBased Carbon Metrics
Mark W. McElroy, Ph.D.
Center for Sustainable Organizations

8. Context-Based Carbon Metrics
•
One of a new class of metrics
called context-based metrics
•
Not like conventional relative
or absolute metrics
•
Impacts measured against
norms, standards, or
thresholds (science-based) for
what they would have to be in
order to be sustainable
•
Thresholds for carbon
expressed as concentration
limits in the atmosphere (e.g.,
350 ppm)

9. Context-Based Carbon Metrics (cont.)
•
How we build context-based
carbon metrics:
1. Choose a science-based
mitigation scenario (PoleStar)
2. Measure company emissions in
baseline year (2005) and express
as emissions per dollar of
contribution to GDP ($CGDP)
3. Then set reduction targets per
$CGDP for all downstream years
based on science-based scenario
4. Adjust for changes in size of GDP
and inflation, and adjust further to
ensure that maximum allowable
global emissions, if applied to all
GDP-related sources on Earth,
will not exceed maximum
allowable global emissions per
the science-based scenario.
5. Then compare actual company
emissions to reduction targets
and compute scores accordingly.
Actual Emissions
Per $CGDP
Normative Emissions
Per $CGDP
< 1.0 = Sustainable
> 1.0 = Unsustainable

10. Initial Results – World’s First
Context-Based Carbon Ranking
Mike Bellamente
Climate Counts, Inc.

11. Initial Results
• Survey Sample
– 100 public companies in multiple sectors
– Range of analysis: 2005-2012
– Data gathered with assistance of South Pole
Carbon in Zurich (Bloomberg) and CDP
• Top-line Highlights
– 49 of 100 scored sustainably, 51 unsustainably
– At least 3 of the sustainably scoring companies
are known for their histories of using contextbased carbon metrics, including the top two
performers:
• Autodesk and Unilever

12. Initial Results (cont.)
• Top 10 Scorers (Sustainable)
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Autodesk (0.449)
Unilever (0.600)
Eli Lilly (0.601)
Canon (0.611)
L’Oreal (0.679)
GE (0.685)
Reckitt Benckiser (0.699)
Abbott Labs (0.708)
Hyundai (0.730)
State Street Bank (0.739)

13. Initial Results (cont.)
• Bottom 10 Scorers (Unsustainable)
91.
92.
93.
94.
95.
96.
97.
98.
99.
100.
Cisco Systems (1.566)
GM (1.650)
Wells Fargo (1.670)
Citigroup (1.737)
Dow Chemical (1.887)
Conagra Foods (1.889)
Royal Bank of Scotland (2.009)
UPS (2.083)
Molson Coors (2.721)
Weyerhaeuser (3.144)

14. Initial Results (cont.)
• Other interesting results
– We also measured emissions intensity (per $ of
sales) and found no positive correlation
between context-based and intensity scores:
•
•
•
•
#1 Autodesk ranked 6th on intensity
#2 Unilever ranked 52nd on intensity
#3 Eli Lilly ranked 74th on intensity
Worst intensity performer (Cemex) scored
sustainably in the context-based ranking (26th)
– 23 of the 49 companies (47%) that scored
sustainably actually increased their average
annual emissions between 2005 and 2012
(decoupling is possible!)

15. Q&A with Representatives of
GE and J&J
Gretchen Hancock, GE
Jed Richardson, J&J