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.
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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

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