There’s a problem with most major environmental rankings of businesses: Too often, the ratings fail to incorporate advocacy activities that influence environmental regulation.

News corporation’s climate change performance was recently rated AAA by one rating organization — yet Rolling Stone magazine named News corp. CEO Rupert Murdoch No. 1 in its list of “politicians or execs blocking progress on global warming.”

Image courtesy of Flickr user the euskadi 11.

News Corporation’s CEO Rupert Murdoch recently announced that the media conglomerate and parent company of Fox News Channel had become carbon neutral, meaning its operations yielded net zero carbon emissions. His move garnered praise from EPA Administrator Lisa Jackson, and represents what is broadly considered to be best practice for how corporations should respond to climate change. But just two months earlier, Rolling Stone magazine named Murdoch No. 1 in its list of “politicians or execs blocking progress on global warming.” “No one does more to spread dangerous disinformation about global warming than Murdoch,” the article noted, highlighting News Corp.-owned publications like The Wall Street Journal for dismissing climate change as “an apocalyptic scare” and influential Fox News commentators such as Sean Hannity and Glenn Beck for rejecting climate science.

Despite all this, and largely because of the carbon neutrality of its physical operations, News Corp.’s climate change performance was recently rated AAA, the highest possible score in the Global Socrates database produced by MSCI ESG Research, a leading rating organization. In fact, most major corporate environmental rankings, including the Dow Jones Sustainability Index, focus on operational impacts such as pollution levels and regulatory compliance, as well as the presence or absence of environmental management practices affecting operations (such as environmental auditing) and stakeholder engagement (such as environmental reporting).

The problem with nearly all major environmental rating schemes, one that threatens their validity in assessing environmental leadership, is that they fail to incorporate advocacy activities that influence environmental regulation. More than one thousand business leaders have joined We Can Lead, a group that advocates strong climate policy. Twenty companies (including Aspen Skiing Company) have joined Business for Innovative Climate & Energy Policy, a leading corporate policy advocacy group. Meanwhile, according to The Independent, a London newspaper, “anti-climate change think tanks” have received hundreds of thousands of dollars from ExxonMobil. But none of these important acts affect company ratings. Along similar lines, Apple publicly quit the U.S.

1 Comment On: The Factor Environmental Ratings Miss

  • Bruce_Klafter | November 14, 2012

    I happen to agree with the sentiment of this article, but it is also a classic “slippery slope” in that it looks to punish advocacy and speech. ESG ratings are focused upon performance and corporate advocacy is certainly an element of performance. On the other hand, I’m sure ESG firms are wary of creating a screen for advocacy since it requires them to judge what’s “good” and what’s “bad”. Ratings and rankings need to be more objective and injecting further subjectivity into the process is undesirable.

Add a comment