Of the 30 companies in the Electronics and Semiconductor and Peripherals sectors whose environmental and sustainability reporting was analyzed by the Roberts Environmental Center in 2006, Hitachi (Japan) had clearly the best environmental and sustainability reporting based on the Center’s Pacific Sustainability Index. The second tier, all with very high scores and winning A grades, included two other electronics firms, Matsushita Electric Industrial (Japan), Royal Phillips Electronics (The Netherlands), and two semiconductor firms, Applied Materials, Inc. (US) and the industry leader, Intel (US), with Applied Micro Devices (US) just a little behind with a grade of A-.
As in most other sectors we have studied, there is a positive relationship between company size and quality of reporting. In these sectors, however, the relationship is not very strong, with high scores spread across the range of firm size. The low scores of the smallest American companies and one Taiwanese company (Hon Hai Precision Industries) lower the average score at the small end of the range, and the decidedly average score of Siemens (Germany), the largest company in the group, drags down the performance at the large end as a result of failing to include much quantitative data. As usual, there is essentially no relationship between PSI score and number of employees, net income, or net profit margin.
All materials were scored using the Center’s Pacific Sustainability Index which also provides scores for six subcategories of reporting. The highest scores for these went to Intel for expressed environmental intent, Hitachi for environmental reporting transparency, quantitative environmental performance, and expressed social intent, Intel for social reporting transparency, and Royal Philips Electronics for quantitative social performance.
In these sectors the most reported environmental variables were energy used, waste disposed of, and research and development into green technologies. The most reported social information was employee health and safety, compliance with a code of business conduct, and the training of employees.
These findings are based on the information available on the web sites of the largest 30 companies in the electronics and semiconductor and peripherals sectors of the 2005 Fortune Global 500 lists as of October 18, 2005.