Roberts Environmental Center Sustainability Reports Released for Petroleum, Mining, and Metals

Newest reports from Roberts Environmental Center at Claremont McKenna College show that in sectors of petroleum refining, mining and crude oil production, and metals, company size bears no relationship to reporting quality.

The Roberts Environmental Center (REC) has released an analysis of the corporate environmental and social sustainability reporting of more than 100 of the largest companies in the petroleum refining, mining and crude oil production, and metals sectors. Although the petroleum and mining industry sectors in general were more sophisticated about sustainability reporting than their counterparts, the size of a companyor its earningsacross the sectors, did not make a difference in how well it scored.

The original scoring for the petroleum refining and mining and crude oil production reports took place August 2009 through December 2009, and from December 2009 to January 2010 for the metals sector. Companies had about a month to review the initial scores and add information for a potentially higher score. Many did so, and in some cases substantially increased their grades, says REC Research Fellow Elgeritte Adidjaja.

In the category of petroleum refining, the top three companies Mol Group (Hungary), OMV Group (Austria), and S-Oil (South Korea) outscored the large multinationals including Exxon Mobil, Royal Dutch Shell, and Chevron. “In these companies, as in our contemporaneous report on mining and crude oil companies,” says REC director Emil Morhardt, “there is essentially no relationship between size and the quality of reporting; five of the top six scorers among petroleum refining companies are in the bottom revenue quartile.”

Bigger doesn’t mean better also rung true for the reporting of the world’s largest mining and crude-oil production companies. But unlike the petroleum refining sector, more than half of the mining and crude-oil companies “do a very poor job of reporting,” and scored a D+ or lower, Morhardt says. The lack of relationship between quality and revenue is largely driven, he says, by faulty reporting of Pemex, the biggest enterprise in Mexico and Latin America, and the highest fiscal contributor to Mexico. The best reporters, BHP Billiton (Australia) and Newmont Mining (USA), do as good a job as the best companies in any sector, he says. “So the deficiencies of the majority have nothing to do with the nature of the business.”

The sector with the least impressive reporting was metals, which scored almost 30 percent lower than those of other extractive industries. Except for Alcoa (USA), “whose reporting is reasonably good in an absolute sense,” the sector “has a long way to go,” Morhardt says. About one-third of the companies scored a D, and 13 percent of them aren’t posting sustainability information online. As well, Chinese companiesexcept for Aluminum Corporation of Chinado not provide sustainability reporting on their websites.

The complete reports for each sector, including company ratings, are available at: http://www.roberts.cmc.edu/PSI/SectorReports.asp.

It is the hope that this REC Sector Analysis will encourage these corporations to increase environmental and social transparency.

Many of the company’s websites represent the company as being responsible when it comes to sustainability, but oftentimes the materials and information on the website does not provide evidence of that, therefore giving them lower scores. Also, many companies report on environmental efforts/policies, but not human rights efforts/policies.

About Roberts Environmental Center

The Roberts Environmental Center is an environmental research institute at Claremont McKenna College located in Claremont, Calif. Its mission is to provide students with a comprehensive and realistic understanding of today’s environmental issues and the ways in which these issues are being and can be resolved, beyond the confines of traditional academic disciplines and curriculum. The Center strives to identify, publicize, and encourage policies and practices that achieve economic and social goals in the most environmentally benign and protective manner.