Who’s the most sustainable company?” I am asked that “mirror-mirror-on-the-wall …” question a lot. The winner depends on who the judges are, their assessment criteria, and the intended audience for their selections. Lists that are done for investors identify companies that are doing the best at avoiding sustainability-related risks and capturing sustainability-related opportunities. Based on publicly available data, here are five lists of the most attractive sustainable companies for investors to consider.
Corporate Knights’ Global 100 Most Sustainable Companies
The aim of this Corporate Knights magazine assessment applies to all five lists: “We want to mainstream sustainability in the business community. By applying objective corporate social and environmental measures that clearly show which companies stand above their peers, our aim is to create a virtuous cycle where the most sustainable companies attract the most capital and earn the best returns.” Corporate Knights is refreshingly transparent about its ranking methodology.
CR Magazine’s 100 Best U.S. Corporate Citizens
Corporate Responsibility (CR) Magazine does an annual list of the 100 best U.S. corporate citizens, so it only considers American companies. Its criteria categories, summarized opposite, shows that it could easily be renamed as a list of the most sustainable companies in the U.S. As do the other rankings, its seven categories address the financial / governance, environmental, and social aspects of sustainability.
Newsweek’s Global 100 Greenest Companies
A third magazine-led ranking is Newsweek’s annual lists of greenest companies. It generates annual lists of the 500 greenest U.S. companies and the 100 greenest global companies. Newsweek relies on help from MSCI’s Riskmetrics, CorporateRegister.com, and Trucost, all of which use proprietary methodologies. The three broad categories of criteria align with sustainability criteria, while seeming to be a little light on the social dimension of sustainability.
SAM’s Global 103 Gold Class Sustainable Companies
Goldman Sachs GS SUSTAIN, Société Générale’s CSR group, and Sustainalytics are in the business of picking the best performing sustainable corporations. So is Sustainable Asset Management (SAM). Its annual yearbook lists the Leaders and Movers in each of 58 industry sectors. It also names 103 companies that earned its highest classification as Gold Class companies.
Portfolio 21’s Global 104 Most Sustainable Companies
Unfortunately, as with the SAM, CR, and Newsweek lists, the details of Portfolio 21’s evaluation method are proprietary. The Portfolio 21 fund has holdings in an unranked list of 104 global companies deemed to be the most sustainable, and tracks its fund’s performance against the rest of the market. As might be expected, the Portfolio 21 fund outperforms the market over the long term.
So which companies are the fairest of them all? No corporation appears on all five of the above lists of 100 or so of the most sustainable companies in 2010. Just seven corporations appear on four of the five lists: Baxter, Intel, Johnson Controls, Roche, Samsung, Siemens, and Suncor / Sunoco. Twelve companies are on three of the five lists: GE, Henkel, IBM, Johnson & Johnson, Nokia, Novo Nordisk, Novozymes, Procter & Gamble, Royal Dutch Shell, Telfonica, Unilever, and Westpac Bank. Six companies are in the top-20 of the Global 100, Newsweek, and CR ranked lists: Hewlett-Packard, IBM, Johnson & Johnson, Nokia, Toyota, and Vodafone. The disappointing lack of consensus reinforces the importance of common, rigorous criteria so that we would know a sustainable enterprise when we saw one. More on that in my next blog.
P.S. If you are interested in hearing my current talk on the compelling business case for sustainability-related strategies, Transitioning to Green is offering a free, live webinar with me as part of its Thought Leader Webinar Series. Entitled “The Next Sustainability Wave: Building Buy-in and The Business Case,” it will be on April 14, 2011, from 12 noon – 1 pm EDT. You can register here.