Honda Gets "C" For Sustainability; GM Gets An "A"
by John Laumer, Philadelphia on 11.30.06

Last year we introduced you to the Claremont McKenna College, Roberts Environmental Center "PSI Sector Reports". We explained that "The Roberts Environmental Center at Claremont McKenna College uses student labor to normalize corporate sustainability self-reports into an easy-to-grasp index". Well, Roberts recently released the motor vehicle sector report and was it a stunner. The global list of major car and parts makers were each graded cumulatively using weighted combined factors: EI = Environmental Intent; ER = Environmental Reporting; EP = Environmental Performance; SI = Social Intent; SR = Social Reporting; and, SP = Social Performance. You should be sitting down for this. And we got to say up up front that we're not sure how much weight mileage gets in the EP category (if any). Referring to the chart above, companies getting "A+" are: General Motors (U.S.A.); Volkswagen (Germany); and, DaimlerChrysler (Germany). Toyota did OK with an A-. But Honda just got an average - "C." For a quick glance at how the visual index ranking works we excerpted a small portion and put it in the extended text below. To see the entire report with all the details look here.( a pdf file download)

Reminder: the value of this ranking lies in its normalilzation. Because the reporting is voluntary, each corporation chooses and presents their own metrics. Without a normalization process like this one, the reading of individual reports amounts to putting a micrometer on a fog bank. TreeHugger offers a tip of the racing hat to the students at Roberts.


















I think much of the value of this report is lost behind the corporate veil. After all, while GM may have scored well, its principle component manufacturer, Delphi, scored very poorly. Likewise, both Goodyear and Bridgestone, also major players in the auto industry and major components of the manufacturing process, also scored quite poorly. By dividing the labor into multiple companies, it becomes very easy to appear to offset irresponsible behavior.
I think much of the data presented represents an attempt by major companies to "greenwash" themselves into appearing to be responsible without having to implement the necessary (albeit painful) changes.
=== author's response follows ====
Yours is a well reasoned and stated point of view. However, the shedding of Delphi, for example, was not likely done mainly for environmental appearances. I suspect financial issues mainly led to the spin off. In other words, the matching of poor environmental/social performance and low profitability for some low ranked firms might also be viewed as purely cooincidental.
I am fairly sure that low ranked firms are not pleased with this and some will be motivated by it to get cranking on improvements. That leads to strategic decisions. Which of the listed factors do the low ranked firms go after first? Social or environmental are very different realms. This is the point of leverage for stockholders and customers.
Dumb question: What does the "social" part of the study translate to?
From the linked PDF, at the start they state that "It is based on all environmental and social information available on their web sites during the period of our analysis."
Further along however, they narrow down the data-set: "How do we collect our data? Relevant English web pages are downloaded from the main corporate website for analysis."
Pure speculation, but perhaps Honda's poor social performance in this report relates to it being primarily a Japanese company? The information may be there, just not (yet) translated into English.
Good on Toyota and all the other non-English companies that scored higher for having the info available they were looking for.
Looking forward to seeing similar reports written up, profiling all companies based on their content available in Chinese and Hindi. ;-)
While the weaknesses of this study are many, it is important to note that there is more to an auto company's environmental and social performance than the mileage of their vehicles. Auto parts and assembly plants can vary from dirty black to green (Ford's Rouge truck plant with the green roof) to LEED (GM's in Lansing, MI).
===== author's response ====
Good point. And because all the information reviewed is voluntarilly offered, the best hope for improvement of accuracy in the reports, quite frankly , is the 'shame factor'.
it is important to note that there is more to an auto company's environmental and social performance than the mileage of their vehicles
By limiting the "study" to English-language resources put out by the companies, and by using some custom methodology, this "study" is worth about as much as a Grand Am with 150,000 miles on it (if one has even gotten that far).
==== author's response follows ===
And you have validated that Toytota and Honda and the other Asian based firms listed do not have english language sustainability reports on their websites?
And you have validated that Toytota and Honda and the other Asian based firms listed do not have english language sustainability reports on their websites?
That's not what I said. The point is that that it's self-limited by language, for one. Secondly, performance is only 32% of the score. Thirdly, "social" aspects comprise 47% of the score.
If you actually compare the GM and Honda graphs, you'll see that GM does very well on "intent", and that its social scores are far better than their environmental ones. Honda, on the other hand, barely registers in "social" criteria, though it scores very similarly on environmental criteria with GM.
The headline of this post, therefore, is very misleading, IMO -- put forth in a "man bites dog" manner.
The reason that GM did very well on the PSI is that GM quite systematically followed the GRI reporting guidelines, on both environmental and social issues, and the PSI covers much of the same ground.
Most of the existing PSI scores are based on transparency (the number of things reported on) rather than performance (note that all performance scores tend to be low). This is because the current version of the PSI requires that, to get high performance scores, companies must compare themselves to their peers and be doing better than average. Few companies make this comparison. In the new version of the PSI, which will be used in the next round of sector reports currently underway, we make that comparison ourselves.
Honda did poorly primarily because the Japanese web site presents almost no social data. Both the North American sustainability report, produced by Honda North America, and the corporate reports are quite good on the environmental side, but neither presents much social information that constutes about half of the PSI score. We believe that Honda is highly responsible both environmentally and socially, and have talked to them at length about improving their reporting (which the North American group is quite interested in doing). My guess is that the the high score achieved by Toyota will influence the Honda corporate group in the next round.