The Open for Good project (OFG) at UCLA collects sustainability disclosures that firms publicly release, including information from corporate sustainability reports and mandatory filings such as annual proxy statements. OFG’s metrics are based on the environmental disclosures identified in the World Economic Forum’s 2020 report, Measuring Stakeholder Capitalism: Towards Common Metrics and Consistent Reporting of Sustainable Value Creation (link). This report outlines key metrics that all firms should track, disclose, and improve upon, drawing from widely recognized environmental reporting standards such as the Carbon Disclosure Project (CDP), the World Resources Institute (WRI), the Task Force on Climate-related Financial Disclosures (TCFD), and the Greenhouse Gas Protocol (GHG Protocol). OFG's metrics focus on three key dimensions: Transparency, Performance, and Governance, which provide a comprehensive view of a firm's environmental practices. Transparency assesses a company's openness in disclosing environmental impacts, while Performance evaluates quantitative data such as emissions, water usage, and waste generation. Governance reflects a firm's commitment through leadership statements, board expertise, and goal setting, ensuring accountability in environmental management.
For each metric, we evaluate whether firms fully disclosed, partially disclosed, or did not disclose relevant information. Firms were awarded a “1” for full disclosure (GREEN), a “0.5” for partial disclosure (ORANGE), or a “0” for no disclosure (RED). An example of partial reporting includes reporting data for only a specific demographic but not the company. For Scope 3 emissions categories, each firm was scored based on the percentage of the 15 disclosed categories.
After data collection, we verified accuracy by having a second team member cross-check each entry for validity. The team evaluated any inconsistencies further and corrected them. We also checked dataoutliers for each metric, again verifying their accuracy.
Transparency Metrics
GHG Scope 1 Emissions – Direct greenhouse gas emissions for a firm’s activities. Usually, from the emission of industrial gases and the combustion of fossil fuels
GHG Scope 2 Emissions – Emissions associated with the generation of electricity used by a firm
GHG Scope 3 Emissions – Emissions associated with a firm's supply chain and the emissions associated with the use of its products and services
Water Use – Water withdrawn, and water consumed by the firm
Water Stress – Water withdrawn and water consumed by the firm from water-stressed areas
Biodiversity – Firm operations near key biodiversity areas
Performance Metrics
Total GHG Scope 1 Emissions – Metric tons of greenhouse gas emission directly from firm activities
Normalized GHG Scope 1 Emissions – Total GHG Scope 1 Emissions divided by total revenue
Total GHG Scope 2 Emissions – Metric tons of greenhouse gas emissions from electricity production for the energy consumed by the firm. This can be reported in location-based (based on the generation mix of the area/regions the firm operates in) or market-based (based on where the firm purchases its power). The GHG Scope 2 Emissions are identified as uncategorized without identifying either location- or market-based.
Normalized GHG Scope 2 Emissions – Total GHG Scope 2 Emissions divided by total revenue
Total GHG Scope 3 Emissions – Metric tons of greenhouse gas emissions from a firm's supply chain and its products and services. There are 15 categories of scope 3 emissions which can be used to provide further detail on what activities are being included in a firm’s scope 3 emissions number.
Normalized Scope 3 Emissions – Total GHG Scope 3 Emissions divided by total revenue
GHG Scope 3 Emission Categories – List the 15 categories used to calculate scope 3 GHG emission. Not all 15 categories will apply to every firm.
Water Utilization – Megaliters of water withdrawn and consumed by a firm. Withdrawn water is returned to the source, while water consumed is removed entirely.
Biodiversity Areas – Hectares of firm operations near key biodiversity areas.
Governance Metrics
Environmental Skill as Key Board Member Competency—The firm has identified which of its directors has expertise on environmental issues on its proxy statement. Firms are required to identify the competencies of each board member that qualify them as board members.
Choosing to include environmental skills as a key competency is a choice the firm makes
Executive Compensation Tied to ESG Milestones—The firm has tied at least part of its c-suite executives’ compensation packages to achieving specified environmental, social, and governance targets.
GHG Assurance – The firm had indicated that it uses an external party to verify its GHG emissions reporting.
TCFD Disclosure – The firm follows the Taskforce on Climate Related Financial Disclosures (TCFD) in its reporting
Has Net Zero Goal – The firm has disclosed a target year for achieving net zero greenhouse gas emissions.
NZG Covers Scope 1, Scope 2, Scope 3 – The firm’s net zero target includes specific scopes of GHG emissions
Working on SBTI – The firm’s net zero target states they are using the Science Based Targets Initiative (SBTI)
Status of SBTI—The firm’s use of the SBTI goes through several stages of verification, which indicates what level it has achieved.
Has Interim Goal to Net Zero – The firm has disclosed interim goals to measure its progress toward its Net Zero goal
Net Zero Included in Proxy Filing—The firm included its Net Zero goal in its proxy statement filed with the US Securities and Exchange Commission.
Category 1: Purchased Goods and Services. This category includes all upstream (i.e., cradle-to-gate)emissions from producing products purchased or acquired by the reporting company in the reportingyear. Products include goods (tangible products) and services (intangible products).
Category 2: Capital Goods. This category includes all upstream (i.e., cradle-to-gate) emissions from the production of capital goods purchased or acquired by the reporting company in the reporting year. Emissions from the use of capital goods by the reporting company are accounted for in Scope 1 (e.g., fuel use) or Scope 2 (e.g., electricity use) rather than Scope 3.
Category 3: Fuel- and Energy-related Activities. This category includes emissions related to the production of fuels and energy purchased and consumed by the reporting company in the reporting year that are not included in Scope 1 or 2.
Category 4: Upstream Transportation and Distribution. This category includes emissions from the transportation and distribution of products purchased in the reporting year between a company’s tier 1 suppliers [link] and its operations in vehicles not owned or operated by the reporting company (including multi-modal shipping where multiple carriers are involved in the delivery of a product, but excluding fuel and energy products); and third-party transportation and distribution services purchased by the reporting company in the reporting year (either directly or through an intermediary), including inbound logistics, outbound logistics (e.g., of sold products), and third-party transportation and distribution between a company’s facilities.
Category 5: Waste Generated in Operations. This category includes emissions from third-party disposal and treatment of waste generated in the reporting company’s owned or controlled operations in the reporting year. This category includes emissions from the disposal of both solid waste and wastewater.
Category 6: Business Travel. This category includes emissions from the transportation of employees forbusiness-related activities in vehicles owned or operated by third parties, such as aircraft, trains, buses,and passenger cars.
Category 7: Employee Commuting. This category includes emissions from employees' transportation between their homes and worksites. Emissions from employee commuting may arise from automobiles, buses, rail, air, and other modes of transportation (e.g., subway, bicycling, walking). Companies may include emissions from teleworking (i.e., employees working remotely) in this category. A reporting company’s Scope 3 emissions from employee commuting include the Scope 1 and Scope 2 emissions of employees and third-party transportation providers.
Category 8: Upstream Leased Assets. This category includes emissions from the operation of assets leased by the reporting company in the reporting year and not already included in the reporting company’s Scope 1 or scope 2 inventories. This category applies only to companies that operate leased assets (i.e., lessees). For companies that own and lease assets to others (i.e., lessors), see category 13 (Downstream leased assets).
Category 9: Downstream Transportation and Distribution. This category includes emissions in the reporting year from transportation and distribution of sold products in vehicles and facilities not owned or controlled by the reporting company.
Category 10: Processing of Sold Products. This category includes emissions from processing intermediate products sold by third parties (e.g., manufacturers) subsequent to sale by the reporting company. Intermediate products require further processing, transformation, or inclusion in another product before use, resulting in emissions from processing subsequent to sale by the reporting company and before use by the end consumer. Emissions from processing should be allocated to the intermediate product.
Category 11: Use of Sold Products. This category includes emissions from goods and services the reporting company sells in the reporting year. A reporting company’s Scope 3 emissions from the use of sold products include the Scope 1 and Scope 2 emissions of end users. End users include both consumers and business customers that use final products.
Category 12: End-of-Life Treatment of Sold Products. This category includes emissions from the waste disposal and treatment of products sold by the reporting company (in the reporting year) at the end of their life. This category includes the expected end-of-life emissions from all products sold in the reporting year.
Category 13: Downstream Leased Assets. This category includes emissions from the operation of assets owned by the reporting company (acting as lessor) and leased to other entities in the reporting year that are not already included in Scope 1 or 2. This category applies to lessors (i.e., companies that receive payments from lessees).
Companies that operate leased assets (i.e., lessees) should refer to category 8 (Upstream leased assets).
Category 14: Franchises. This category includes emissions from the operation of franchises not included in Scope 1 or Scope 2. Franchisors should account for emissions from the operation of franchises (i.e., the Scope 1 and Scope 2 emissions of franchisees) in this category.
Category 15: Investments. This category includes Scope 3 emissions associated with the reporting company’s investments in the reporting year that are not included in Scope 1 or 2. This category applies to investors and companies that provide financial services. It also applies to investors that are not profit-driven, and the same calculation methods should be used.
Ten firms from the Consumer Staples sector, some of the largest in the S&P500 index have been identified by CalSTRS as quality investment opportunities: Coca-Cola, Colgate-Palmolive, Clorox, Estee Lauder, General Mills, Hershey’s, Kraft Heinz, Molson Coors, PepsiCo, Philip Morris.
The Coca-Cola Company, founded in 1892, sells and manufactures soft drinks, non-alcoholic beverage syrups, and alcoholic beverages.
Colgate-Palmolive Company was established in 1953 with the merger of Colgate and Palmolive. They specialize in the production and sale of household, health care, personal care, and veterinary products.
The Clorox Company, founded in 1913, produces and sells household products focused on cleaning products and other in-home consumable items.
The Estee Lauder Companies Inc. is a cosmetics company which markets and manufactures products for a diverse range of name brands it owns including La Mer, Clinique and Tom Ford Beauty.
General Mills, Inc. was established in 1856 as a grain milling company in Minneapolis. They produce and sell a variety of consumer food products including flour, processed cereals, and dairy products.
The Hershey Company began in 1894 as a chocolate processing company growing to produce many more food products over the decades. They are currently primarily focused on processed confectionary products (candy).
The Kraft Heinz Company began in 2015 with the merger of Kraft Foods and H.J. Heinz, two venerable food producers. They currently manufacture and sell a wide range of products including packaged foods, sauces, seasonings, juices, and dairy products.
Molson Coors Beverage Company was formed in 2005 with the merger of the US beer producer Coors and the Canadian beer producer Molson which also acquired Miller Brewing in 2015.They produce and distribute alcoholic beverages including beer, malt beverages, wine, and spirits.
PepsiCo, Inc. was founded in 1898 as a beverage company expanding into the snack food space over the years. Beyond soft drinks, bottled water, and juices, they produce and sell a diverse range of snack food products from brands such as Lay’s, Doritos, Cheetos, and Cracker Jack.
Philip Morris International Inc. has been in operation since 1847 but arrived at its current form after a series of spin-offs in 2008. They produce, market, and sell tobacco based products.
