World’s most sustainable companies
What are the world’s most sustainable companies? Sustainability has an important role on the agendas of social, economical and political actors. Perhaps as a result of this endeavor, companies have actively constructed a sustainability plan. In this way, sustainability does not only concern environmental factors, but also ethical ones. As in: What is the role of the company in the cultural en social relations in other countries? To what extent are the business activities ‘fair’?
But as it appears, companies are still mainly focused on securing their future corporate activities, in which sustainability has an increasingly important role.
Corporate Knights has constructed a global ranking of the 100 most sustainable companies in 2020. This ranking shows the global distribution of sustainable companies. However, we are talking about corporate businesses. A winner is not only progressive in terms of sustainability, but also in terms of value and profits.
This is not strange. A corporate goal to become more sustainable is useless when profits don’t support the effort.
How to measure sustainable companies?
One has to make certain selections in finding the world’s most sustainable companies. Which selections are reasonable?
Firstly, Corporate Knights has made a condition to list companies that have a publically shared gross revenue of at least $1 billion in the financial year of 2018. Small companies cannot be compared with multinationals in terms of sustainability efforts.
Secondly, companies have been ranked on key performance indicators (so called KPI’s), which are, among others:
- Employee management, for example women in high ranking functions.
- Financial management, for example innovation, research and development budget.
- Resource management, as in resources and emissions.
- Clean revenue, the relative amount of revenue from clean services/products.
It appears that sustainable companies are not spread equally around the world, but rather concentrated in certain regions.
Sustainable companies in Europe
Europe has a first place in sustainable companies on a global level, with 49 out of 100 sustainable companies. The development towards sustainable businesses has largely been backed up by regulations. It is therefor not surprising to see Europe having the most sustainable companies.
With nine companies in the list, France is number one, remarkably followed by Finland with six companies.
Ørsted is a Danish company that traditionally focused on oil and gas production. Last decade, the company has shifted its activities more towards renewable energy. Although this shift was not a complete transformation of the company’s business activities, it can be seen as an important shift away from non-sustainable activities towards more sustainable activities. Sustainability in this sense does not only concern ‘environmental friendly’, but also activities that are still economically attractive in the future.
It appears that Ørsted cannot run the company solely based on short term profits. Focusing on the long term results obligates this particular company to change its activities towards more sustainable activities.
From an economic point of view, Ørsted has shifted from fossil fuel production towards renewable energy production. However, this shift can also be seen as an answer to a changing demand for green energy from society, consumers and companies.
Sustainable companies in North America
North America has 29 out of 100 sustainable companies worldwide. The US alone has 17 out of 100 sustainable companies, and Canada has 9 companies on this list.
At number 4 of worldwide most sustainable companies, is Cisco Systems, largely as a result of clean revenues with a revenue of $25 billion. The software company Autodesk has a 43rd place due to its cloud platform that operates largely (99%) on renewable energy. These companies are also examples of the way that corporate companies can make a shift towards sustainability. These days, sustainability and corporate profits can actually go hand-in-hand.
Sustainable companies in Asia
Asia has a stunning 16 out of 100 sustainable companies. Japan appears to be the leader in Asia. As in North America, sustainable companies in Asia range between computer industries to car industry (respectively Panasonic and Toyota).
Sekisui Chemicals is a Japanese company that produces plastics. Their position on the list is mainly due to the environmental friendly housing they produce. And due to its corporate policy that is in line with the UN Sustainable Development Goals.
Sustainable companies in the rest of the world
As to be expected, the rest of the world hold a minor 6 out of 100 sustainable companies. Remarkable is the share of banks in this list, mainly in South America but in fact in the entire list worldwide.
Another remarkable thing is the extent to which these companies are growing in terms of sustainability. One could conclude that sustainability is a part of corporate development. Corporate business in not only about making profit, but also to have a positive impact on the planet and people. But rather, sustainability seems to be about preparing the company for future demands.