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.
Bob
 
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.
 

12 Responses to “5 Lists of the Most Sustainable Companies”

  1. […] When we celebrate companies ranked as being the most sustainable (see my April 5, 2011, blog: 5 Lists of the Most Sustainable Companies), are they really just the best of a bad lot? When a company is certified as making significant […]

  2. […] When we celebrate companies ranked as being the most sustainable (see my April 5, 2011, blog: 5 Lists of the Most Sustainable Companies), are they really just the best of a bad lot? When a company is certified as making significant […]

  3. Bob Willard says:

    Although I expect that corporate transparency on sustainability issues would promote employee satisfaction, I haven’t seen studies that make that correlation. Other studies show correlations between the level of company CSR / sustainability activity (versus how transparent it is about reporting on them) and employee engagement, and how employee engagement correlates with better business results. See my CSR Efforts Correlate with Employee Engagement and CSR Efforts and Employee Engagement Drive Business Results blogs in October 2010 for more on those correlations.
    Bob

  4. 00NAGH CHAN says:

    Dear Sir:

    How do you see the relationship between corporate transparency and Employee job satisfaction and is CSR a driver / determinant or Corporate transparency. A bit confused regarding the relationship of the three ….

  5. Bob Willard says:

    Carrie, GlobeScan’s global surveys for its annual CSR Monitor show that people in some countries are more focused on the social dimension of sustainability than the environmental aspect. It would behoove corporations that want to improve their sustainability brand image in particular jurisdictions to be aware of those differences. Having said that, it would be even better if they aspired to meeting Mother Earth’s definition of a sustainable enterprise, as described in my next blog.

    Bob

  6. Carrie Cooper says:

    Hello – interesting article! I’m just wondering if there is a resource for finding the criteria/definition of “sustainable” from country to country. Also, do you know if there are any initiatives to create a global and/or regional definition of what are sustainable corporate practices?

    Thanks!

    Carrie Cooper

  7. Bob Willard says:

    Good points, Frank. I build on them in next week’s blog. Stay tuned …

    Bob

  8. Frank Gaugler says:

    Thank you for this information! This is a compelling illustration of the fact that so much depends on who is defining sustainability and for what purpose. I’m looking forward to digging into these lists more deeply. Without a clear sense of the reporting metrics and verification processes that companies are using, even the data within each report must be viewed with a critical eye. As you know, there is often a significant gap between intentions and documented actions.

    The lack of crossover among the lists certainly does suggest the need for more consensus in reporting and evaluating sustainability data, especially when attempting these kinds of comparisons. There is also no small irony in in the general absence of methodological transparency used in compiling these lists, given that transparency is often cited as a value of sustainable enterprises.

  9. Bob Willard says:

    It’s nice to hear from you, Sophie. Thanks for your comment. My next blog will be about the upcoming ULE 880 standard, which is even more explicit about criteria for a sustainable enterprise. That may be a helpful resource, as well.

    Bob

  10. Bob Willard says:

    I agree, Marco. Improvements in carbon intensity / efficiency are nice, but are just a step in the right direction. The goal is a reduction in the absolute amount of emissions, which is the only thing that Mother Nature cares about.

    Bob

  11. Very nice article. There is another consideration that I would like to add here.
    I remember on the publicly available database of the GRI reports that some companies stated their progress in their 'efficiency gains' per unit produced. The specific case was: our production of tonne of X, per unit, has become more efficient and emits less CO2 per unit, by 4%. At the same time though, their overall production of X had expanded by more than 10%.
    Now, the biosphere doesn't talk in percentages but in tonnes, so I wonder if there is any way that we can make sure that the overall impact on the biosphere has lessened thanks for the improvements in efficiency and/or substitution in practices of a specific company's activities. We can use the four principles of sustainability as defined by The Natural Step as a guidance, and again the key point would be to make sure that in such reports (and in the rankings) we talk about absolute gains, versus relative improvements. All the best,
    Marco Valente,
    Project Assistant at MSLS,
    Karlskrona, Sweden. 

  12. Thanks for this Bob. We're currently working internally to determine our own criteria for green businesses so that we can help our members work toward meeting those criteria. It's certainly not an easy process. I'm going to give these lists some consideration when I'm putting together my recommendations for the Sustainability Committee.

    I hope you are well!
     
    Sincerely,
    Sophie

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