What does climate change have to do with corporate governance?

It used to be that conversations about corporate governance and environmental management happened in separate circles. The governance folks focused their energy on lamenting egregious pay packages and accounting scandals, leaving the more touchy-feely environmental topics to others. But over the past few years, these two topics have continued to converge – with more institutional investors and governance advocates evaluating corporate approaches to key sustainability issues such as climate change through a governance and risk lens.

Sustainability isn’t just for socially responsible investors anymore.

And companies are taking action – as evidenced by a new study published by the investor group CERES: Corporate Governance and Climate Change: Consumer and Technology Companies. The study, prepared by the governance research firm RiskMetrics Group, ranks climate change and governance practices at 63 tech and consumer companies – using a “Climate Change Governance Framework” with metrics ranging from board oversight mechanisms to emissions accounting. Not all companies ranked well – including some ones with pretty good “green reputations” which I found surprising.

I expected that Intel would do fairly well based on our long history of looking at the issue of climate change, but you never know how these things are going to shake out (the downside of more and more companies improving their sustainability performance). So I was pleased to find that in the ranking of the 63 companies in the report (48 US and 15 non-US companies) – we not only earned the top score in the semiconductor sector but we came in 4th overall, (sharing the top five with our tech peers IBM and Dell.)

We earned recognition in a number of areas that people might not automatically think of when they think about climate change governance. Although goals and reduction targets were important factors in our overall ranking, we also earned points for incorporating discussions of climate change into our securities filings (we recently expanded our discussion of climate change in our most recent 10-Q), aligning a portion of our employees’ annual bonus to environmental metrics (including energy efficiency and renewable energy goals), and collaborating with government and industry groups on initiatives such as the Climate Savers Computing Initiative and the report Smart2020: Enabling the low carbon economy in the information age (see recent blog post by my colleague Stephen Harper.)

Anyway, I’ve already started to dig into some of the other profiles to see where we might be able to glean some nuggets to feed back into internal discussions of how our actions and policies fair compared against other companies. Already getting questions from my colleagues of why we’re “only” at number four…argh.