One trend I’ve been paying attention to lately is the growing tendency for organizations to provide an account of their sustainability. In fact, thousands of companies now voluntarily report on environmental, social and governance issues (ESG). Of course, some organizations prefer not to be so transparent, either on principle, or because they’d rather keep their dirty laundry private. But in those cases where organizations are unwilling to voluntarily offer their own sustainability accounts, detailed ratings and evaluations are increasingly available through ASSET4, Goldman Sachs SUSTAIN, KLD and others. And in August 2009, Bloomberg’s 250,000 customers gained access to ESG data on more than 3,000 public companies at no extra charge.
Synthesizing these trends has led me to postulate what might be termed the “inevitable sustainability accounts” thesis. Love them or hate them, whether by choice or compulsion, over the past 10 years or so sustainability accounts have become a virtual requirement for large, complex organizations.
With that general thesis in mind, I was intrigued by news of the 2010 College Sustainability Report Card . In much the same way KLD rates some 4,000+ global public companies across more than 200 sustainability indicators, the Sustainability Report Card graded the sustainability efforts of more than 300 public and private colleges and universities with the largest endowments, from Harvard University ($26 billion endowment) to West Los Angeles College ($0 endowment). In other words, my “inevitable sustainability accounts” thesis seems to not only cover the realm of public companies, but also the realm of another sector of large, complex organizations: higher eduction.
Grades were determined by assessing performance across 43 indicators in nine main categories, including:
- Administration
- Climate Change & Energy
- Food & Recycling
- Green Building
- Student Involvement
- Transportation
- Endowment Transparency
- Investment Priorities
- Shareholder Engagement
Among the 332 schools evaluated this year, 8% of schools earned cumulative “A” level grades, 45% earned “B” level grades, 34% earned “C” level grades, and 13% earned “D” level grades.
Of local interest, Penn State received a B grade as announced on the PSIEE website. A detailed summary is available at GreenReportCard.org. As a point of comparison, Cornell University, my undergraduate Alma Mater, also received a B grade. However, while a B grade put Penn State in the top half of the Big 10 conference, a B grade left Cornell in the bottom third of the Ivy League conference.
Given these apparent systematic differences between the two conferences, an interesting exercise might be to think about possible explanations for “grade” variations across the larger sample. In short, can we “predict” the grades these colleges received? And if so, on what basis? Just off the top of my head: location (blue state v. red state, urban v. rural, single campus v. multi-campus), average SAT scores, admission selectivity rates, endowment size, state funding, research grants, governance structure (centralized, decentralized, federated, etc), athletic program revenue, responsiveness to ESG past issues (e.g., recycling, South African investments, sweat shop labor, etc), characteristics of the top management team (”TMT”; e.g., age, gender, educational and functional background, level of discretion, etc), values of the TMT (egoistic, altruistic, biospheric, etc.), participation in the UN Global Compact.
Although this might seem like a relatively undisciplined list, behind each factor are theoretical reasons why variations might play a contributing role in explaining a college’s sustainability grade. No doubt reasonable people could come up with even more possible explanations if they spent more than 5 minutes thinking about it.
What factors would you use to predict grades? Add a comment or send me an email with your ideas.
