Investing

Are These America's Greenest Big Companies?

As the global environment deteriorates, a growing number of American companies have started to go, or have gone, “green.” There is no single definition of what that means. Some have begun to increase recycling. Others have cut greenhouse gas emissions. Still others plan to become carbon neutral. Among these measures needs to be a commitment to the environment at the board of directors level. Over the past several years, some of America’s biggest public corporations have added environmentally/sustainability-focused board committees.

These committees are designated by a small number of names, such as Corporate Responsibility Committee; Corporate Social Responsibility Committee; Environmental Committee; Environmental, Health and Safety Committee; Public Responsibility Committee; and Sustainability Committee. It is impossible to say exactly what these committees do without attending them or reviewing meeting transcriptions, but U.S. Securities and Exchange Commission disclosures from some offer direction about what they do and how they function. So do the governance statements of the companies themselves.

Sixty-two S&P 500 companies have had this type of board subcommittee for at least four years, according to MyLogIQ. Among the largest are Ford, Gap, Johnson & Johnson, JPMorgan and Nike.


As an example of what these committees do, only a modest part of Nike Inc.’s (NYSE: NKE) Public Responsibility and Sustainability Committee’s goals are related strictly to the environment. It is one of only four board committees. The committee had five official meetings in the past fiscal year, and it has three members:

  • Thasunda B. Duckett, the chief executive officer of Chase Consumer Banking at JPMorgan
  • Michelle A. Peluso, senior vice president of Digital Sales and chief marketing officer at IBM
  • John W. Rogers Jr, who is board chair, co-CEO and chief investment officer of private equity firm Ariel Investments

None would appear to have special qualifications to serve on the committee. Perhaps if they follow the charter, that does not matter.

Part of the Nike committee’s job is to track “social, political, and environmental impact, trends” that might affect the company or in which the company should have a stake. However, the committee also oversees the search for new board members and focuses on whether Nike is an “equal opportunity employer.”

Gap Inc.’s (NYSE: GPS) Governance and Sustainability Committee is focused heavily on environmental issues. Its proxy describes the committee as dealing with “policies and practices relating to social and environmental issues.” It “regularly discusses social and environmental issues at its meetings.” However, the committee had only two members at that time. Robert J. Fisher stepped down because he joined management, and Director Tracy Gardner took his place. She joined second member Mayo A. Shattuck III, who is the non-executive chair of Exelon, an energy company. That should give him some background in environmental issues. Gardner has run retail companies, which is not an ideal background for someone who helps oversee a large public corporation’s environmental policy.

The JPMorgan Chase & Co. (NYSE: JPM) Public Responsibility Committee does not appear to spend most of its time on environmental issues. It oversees “Sustainability, including ESG policies and activities.” ESG is short for “environmental, social and corporate governance.” However, the committee also oversees community lending practices, lobbying and “reputational risk.” The committee met six times last year. Members include:

  • Todd A. Combs, an investment officer at Berkshire Hathaway who runs some of its insurance operations and is also listed as running some of its “utilities and energy”
  • Timothy P. Flynn, retired chair and CEO of audit and consultancy firm KPMG
  • Mellody Hobson, who is co-CEO and president of Ariel Investments

None of these three is an expert on the environment.

If green companies are those with green members and green committees, most of these committees are inadequate to meet the green governance test.

These S&P 500 companies have had one of the categories of “green committees” for at least four years:

COMPANY NAME SECTOR
AES Energy & Mining
AFLAC Financial Services
Albemarle Industrial Products
Altria Retail & Consumer
American Express Financial Services
Amgen Pharmaceutical & Life Sciences
Avery Dennison Retail & Consumer
Bank of New York Mellon Financial Services
Cabot Oil & Gas Energy & Mining
Carnival Retail & Consumer
Celanese Industrial Products
CMS Energy Energy & Mining
Consolidated Edison Energy & Mining
Cummins Industrial Products
DTE Energy Energy & Mining
Eastman Chemical Industrial Products
Ecolab Retail & Consumer
FMC Industrial Products
Ford Industrial Products
Freeport-McMoRan Industrial Products
Gap Retail & Consumer
General Mills Retail & Consumer
Goldman Sachs Financial Services
Harley Davidson Industrial Products
Hasbro Retail & Consumer
Hess Energy & Mining
Hewlett Packard Enterprise Retail & Consumer
HollyFrontier Energy & Mining
Honeywell International Industrial Products
International Paper Industrial Products
Johnson & Johnson Pharmaceutical & Life Sciences
JPMorgan Financial Services
Kellogg Retail & Consumer
Kinder Morgan Energy & Mining
Kroger Retail & Consumer
LyondellBasell Industries Industrial Products
Marathon Oil Energy & Mining
Marsh & McLennan Financial Services
Martin Marietta Materials Industrial Products
McDonald’s Retail & Consumer
MetLife Financial Services
MGM Resorts International Retail & Consumer
Mosaic Industrial Products
Newmont Energy & Mining
Nike Retail & Consumer
NiSource Energy & Mining
Noble Energy Energy & Mining
Occidental Petroleum Energy & Mining
PepsiCo Retail & Consumer
Pioneer Natural Resources Energy & Mining
PPG Industries Industrial Products
PVH Retail & Consumer
Republic Services Industrial Products
Royal Caribbean Cruises Retail & Consumer
Sempra Energy Energy & Mining
Tiffany Retail & Consumer
United Airlines Retail & Consumer
Vulcan Materials Industrial Products
Wells Fargo Financial Services
Weyerhaeuser Financial Services
Williams Companies Energy & Mining
XCEL Energy Energy & Mining

Source: www.MyLogIQ.com