The world’s greenest and most sustainable companies have been highlighted in two parallel reports published this week by CDP, the non-profit global environmental disclosure platform, and Canadian media and research company Corporate Knights, with the common thread in both lists being the consistent economic performance of companies committed to fighting climate change and addressing environmental issues.
The two lists are each based on their own specific methodology and, in the case of Corporate Knights’ Global 100, is relatively involved. (If you want to read their methodology, click here (PDF).) Further, Corporate Knights is ranking corporate sustainability, whereas CDP is ranking companies which are pioneering action on climate change, water, and deforestation. CDP, therefore, bases its list on the companies who are already disclosing their environmental action to the company, analyzed against a diverse range of metrics including transparency, target-setting, and awareness of risks and opportunities, and then according to climate change, water security, and forests. While Corporate Knights narrows its list down to 100, CDP ranks all 6,349 companies that disclose their information. Companies disclosing to CDP do so at the request of over 650 investors with assets totaling $87 trillion and/or 115 major purchasing organizations with a combined spend of $3.3 trillion.
CDP ended up with 126 companies in its climate change A List for 2018 including big-name companies like Apple, Johnson & Johnson, L’Oréal, Microsoft, Nestle, and Sony. However, CDP’s forest A List only boasted 7 companies — such as L’Oréal and TETRA PAK — while its water security A List had a somewhat more respectable 27 companies — including ACCIONA, Ford, Microsoft and, yes, L’Oréal.
In fact, Firmenich, the world’s largest privately-owned fragrance & flavor company, and French cosmetics company L’Oréal, were the only two companies to achieve As across the board for their actions on climate change, deforestation, and water security.
“As a family-owned company, with a legacy of responsible growth, I believe that business has a critical role to play to tackle climate change with a sense of urgency,” said Gilbert Ghostine, CEO of Firmenich. “Building on our consistent “A” rankings with CDP, we are very proud of our triple “A” score this year.
“Today, all of our manufacturing sites in the U.S. and Europe are 100% powered by renewable electricity, on our way to reaching our goal of 100% worldwide by 2020. To further scale up our impact across our value chain, we are the first perfume and taste company to be mobilizing our suppliers to also disclose with CDP, as well as one of only 149 companies worldwide to have approved science-based targets.”
“Congratulations to the companies on the CDP A List for their environmental leadership impacting businesses and supply chains globally,” added Alexandra Palt, Chief Corporate Responsibility Officer at L’Oréal. “As a CDP Supply Chain member, the wealth of information provided by CDP disclosure is critical in helping us understand how our suppliers are performing, and where we can engage with them to reduce environmental impacts and costs. We particularly look to the CDP A List and scoring process to help improve the environmental performance of our suppliers, actively managing risks and identifying future opportunities.”
What’s most impressive, however, is that companies on CDP’s A Lists are consistently economically outperforming their peers.
“As the recent report from the IPCC showed, the next decade is crucial in our shift to a sustainable economy, and we believe corporates are at the heart of this transition,” said Dexter Galvin, Global Director of Corporates and Supply Chains at CDP. “By ranking companies, we aim not just to highlight leaders’ best practice, but to inspire all businesses to aim higher and take more action.
“That the STOXX Global Climate Change Leaders Index – which is based on the CDP A List – outperformed the STOXX Global 1800 by 5.4% per annum from December 2011 to July 2018, demonstrates that the leadership on environmental issues shown by the A List goes hand in hand with being a successful and profitable business.”
Corporate Knights’ own Global 100 similarly shows increased economic performance from their list of the world’s most sustainable companies. Specifically, according to Corporate Knights CEO and editor-in-chief Toby Heaps. “From inception (February 1, 2005) to December 31, 2018, the Global 100 made a net investment return of 127.35%, compared to 118.27% for the MSCI ACWI.”
Given the Global 100’s focus of corporate sustainability, the ranking looks at a range of measures beyond climate change and environmental measures, which ends up providing a raft of fascinating statistics about the top 100 companies. Apparently, the average age of a Global 100 companies is 87 years, while the average age of companies in the MSCI All Country World Index (ACWI) is 63 years. Global 100 companies also have a lower CEO-TO-average-worker pay ratio than the ACWI (76:1 compared to 140:1), and they also pay more taxes, on average 18% of EBITDA compared to 16% — which might seem like an issue, but as Corporate Knights points out, “Companies perceived to be avoiding paying their fair share of taxes through financial engineering are coming under growing pressure from consumers, policymakers and regulators.”
The Global 100 are greener — with double the carbon productivity and derive more of their revenues from clean godds and services (26% of total revenues compared to only 9%). They have more women on their boards (an average of 27% versus 19%) and are more likely to have a link between sustainability measures and executive pay.
The top five companies in the Global 100 were led by Danish bioscience company Chr. Hansen, followed by French apparel and accessories company Kering SA, Finnish renewable and oil refining company Neste Corporation, Danish power company Ørsted, and UK Biopharmaceuticals company GlaxoSmithKline.
“Climate change is one of the defining challenges of our time. We must dramatically accelerate the transformation of the world’s energy systems from fossil fuels to renewables to help protect our planet for future generations,” said Henrik Poulsen, CEO of Ørsted. “At Ørsted, we have reduced our carbon emissions from our energy production by 67% over the past decade towards our vision of a world that runs entirely on green energy. Being ranked among the world’s most sustainable companies makes us both humble and proud and encourages us to pursue our global investments in sustainable energy.”
“We are delighted about our inclusion among the 100 most sustainable companies in the world and utterly grateful and honored to have been selected in the top 3 for the second consecutive time,” added Peter Vanacker, President & CEO from Neste. “Such a top ranking can never be taken for granted as all the world’s best performing companies aim higher and improve their performance year after year. Our ranking shows that Neste has continued to develop its sustainability in the right direction and that our employees are very passionate about helping to create a healthier planet for our children.”
Don't want to miss a cleantech story? Sign up for daily news updates from CleanTechnica on email. Or follow us on Google News!
Have a tip for CleanTechnica, want to advertise, or want to suggest a guest for our CleanTech Talk podcast? Contact us here.