List of Global ‘Good Guys’ beating benchmark by substantial margin
by Michael Smith (Veshengro)
Davos, Switzerland: Corporate Knights, the magazine for clean capitalism, announced its seventh annual Global 100 list of the most sustainable large corporations in the world at Davos in January 2011.
From its inception on February 1, 2005, the Global 100 Most Sustainable Corporations has achieved a total return of 54.95%, outperforming its benchmark (the MSCI All Country World Index) by more than 16% to December 31st, 2010.
This edition of the Global 100 comes on the eve the final phase of meta-study of corporate sustainability rankings, which recognizes the Global 100 for its industry-leading standard of transparency.
The 2011 Global 100 tapped intelligence from the world's largest sustainability research alliance put together by Legg Mason’s Global Currents Investment Management and Phoenix Global Advisors LLC to isolate the top ten per cent of companies from a universe of 3,500 global stocks, which were then transparently ranked based on 10 indicators, with data collected by Corporate Knights Research Group and verified with The BLOOMBERG PROFESSIONAL®
service. Controversy research was provided by Sustainalytics and incorporated by Corporate Knights into its assessment of each company to provide risk mitigation against companies with severe controversies that could be deleterious to share valuation.
The Global 100 includes companies from 22 countries encompassing all sectors of the economy, with collective annual sales in excess of $3 trillion, and five million employees.
Among the 22 countries, Japan led the way with 19 Global 100 companies (14 more than they had in 2010). The United States followed with 13 (one more than in 2010). The UK (11 companies, down from 21 in 2010 ) and Canada (8 companies, down from 9 in 2010) took third and fourth place respectively. Rounding out the top ten scoring countries with the most constituents were Australia (six), Switzerland (six), France (five), Denmark (four), Finland (four), while Brazil, Germany, Norway and Spain each registered three Global 100 constituents. Sixty-six per cent of the 2010 companies remained on the list in 2011.
To determine the Corporate Knights Global 100 for 2011, two improvements were made to build on the previous year’s methodology.
1. Corporate Knights reviewed controversy research provided by Sustainalytics and incorporated it into its assessment of each company to provide risk mitigation against companies with severe controversies that could be deleterious to share valuation.
2. The indicator “Safety Productivity” (Sales (US$) / lost-time incidents*$50k and fatalities*$1M) was substituted for Sustainability Leadership (presence of a board committee dedicated to sustainability issues).
This year’s Global 100 were recognized at the Davos World Economic Forum at a private dinner hosted by Corporate Knights and Inflection Point Capital Management. The dinner discussion which was moderated by Matthew Bishop, of The Economist Magazine, explored how to define a 21st balance sheet for cleaner capitalism that integrates a core group of sustainability factors onto the bottom lines of both companies and countries.
I hate to be a spoilsport in all the celebrations but I really cannot, for the love of me, see how and why some of the companies that have been listed among the 100 Most Sustainable Corporations ever made it into the list.
There are oil companies, pharmaceutical companies and others; companies that are among the world's greatest polluters. Nevertheless it is the likes of those that are awarded such titles. What can actually be believed in the field of green accolades?
Companies, on the other hand, that really make a difference don't ever make the list. Probably because (i) they are not large enough and (ii) they don't pay the facilitation payments that seem to be required.
One of these days, maybe, just maybe, if we keep hammering away at things, we will actually see the real truth of things and will no longer be lied to and greenwashing be a part of the past. But, for the time being we best believe things only if we can see – clearly – as to the behavior of those companies and individuals.
May be I am too much of a cynic and don't trust things enough but this cautionary attitude not to believe things until I have them proven has served me well all those years and whenever I have veered off from this track I have fallen flat on my face.
© 2011
