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Corporate Knights' 2022 ranking of the World's 100 Most Sustainable Companies is based on a rigorous assessment of nearly 7,000 public companies with revenues greater than $1 billion.

What is Corporate Knights?

It is a financial information, research and media products company headquartered in Toronto, Canada, focused on promoting an economic system where prices fully incorporate social, economic and ecological costs and benefits, and market participants are clearly aware of the consequences of their actions.

Again this year, the most sustainable corporations in the Corporate Knights Global 100 are progressing faster than their peers. Members of the MSCI All Country World Index (ACWI), a global equity index, make just 30% of their profits from products or services aligned with Corporate Knights' clean taxonomy, while 47% of the Global 100 do. (vs. 41% last year). Crucially, Global 100 companies are also investing more aggressively in clean technologies and services, with 48% of their capital, R&D, and acquisition spending going to clean investments, versus 34% for ACWI.

This is reflected in their performance. Since the market bottomed in spring 2020, the Global 100 has gained 22% versus the ACWI, reflecting investors' focus on a green recovery. Since its inception on February 1, 2005, the Global 100 Index has generated a total return on investment of 331% compared to 279% for ACWI.

As the “decade of action” to decarbonise the economy begins, more sustainable companies are more productive in terms of carbon and energy. Compared to the average ACWI company, Global 100 members generate more than four times the production per ton of carbon emitted and nearly eight times the production per unit of energy consumed.

In 2021, 60 of the Global 100 companies signed up to the Science Based Targets initiative, aligning their emission reductions with the requirements of the Paris Agreement. This year, that number inched to 65. And while non-Global 100 companies increased their clean investments from 22% in the 2021 ranking to 34% this year, the Global 100 invested, on average, 48%. of their investments in clean activities. , compared to a third a year ago.

47%

% of profit Global 100 companies make from clean products and services, compared to 30% of the benchmark.

Global 100 companies also perform better on other metrics, including sick pay: 82% of members offer at least 10 days of paid sick leave, compared to 74% for ACWI. The ratio of CEO pay to the average worker is also lower at Global 100 companies, at 111:1, while at other companies, the pay gap has increased from 124:1 to 140:1, widening the gap between executives and workers. . And while 87% of Global 100 companies link executive compensation to meeting sustainability goals, up from 80% last year, the proportion of companies in the benchmark may have more than doubled, but that it's from just 14% last year to 34% this year.

In terms of diversity, the differences are less clear. In Global 100 companies, on average, 32% of directors are not men, the same as last year, while for ACWI the proportion has improved from 24% to 30%. When it comes to leadership diversity, 13% of Global 100 company board members and 12% of executives are racially diverse.

One area where Global 100 companies do not outperform the benchmark is in paying taxes: both the Global 100 and ACWI pay 13% tax.

Corporate Knights introduced a letter grade system this year that awards Global 100 companies grades ranging from A+ to D–. These ratings were converted from the companies' overall scores, based on Corporate Knights' 23 key indicators. All companies in the Global 100 have well-above-average sustainability practices: letter grades reflect the companies' position relative to other high-performing companies.

While banks account for a tenth of this year's index, it is technology groups of all varieties that dominate, including telecommunications, chipmakers, computer makers and business service providers. There are 17 new members of the Global 100, including US-listed Evoqua Water Technologies and Beijing Enterprises Water Group, highlighting growth

Mike Scott 

Source: corporateknights.com