Corporate Knights today released the 14th annual Global 100 list of the most sustainable large corporations in the world. Selected from a pool of 5,994 publicly listed companies – each evaluated on a set of up to 17 environmental, social and governance indicators relative to their industry peers using publicly available information – the Global 100 companies hail from 22 countries and encompass all sectors of the economy.
The top-ranked company in this year’s Global 100 is Dassault Systèmes, the French multinational software company, whose digital technologies assist companies and governments alike in reducing waste, adopting renewables, and creating smarter cities. Finishing 11th last year, its climb is due to strong female representation on the board (six of 11 current directors), a relatively small pay gap between the CEO and average worker (30:1), and a strong financial contribution to society (paid taxes equal 26.5% of EBITDA over past five years). Dassault Systèmes also pulls in a quarter of its revenues from products and services that preserve the environment.
Following closely behind is Finland’s Neste Oil, a refining and marketing company that has begun directing more than 90 percent of its investments into renewable fuel and bio-based materials, putting it on track to earn over half its revenues from clean sources in the next five years. In third place is another French company, automotive supplier Valeo, which has placed a strong emphasis on helping automakers reduce carbon emissions. Belgian pharmaceutical corporation UCB and Finnish construction and engineering firm Outotec round out the top five.
The Global 100 companies paid an average of 27 per cent more taxes, had three times as many top female executives, and generated six times more clean revenue than their global peers.
The Global 100 companies demonstrate the strong linkage between the delivery of superior value for society and the generation of superior financial performance. They also have greater longevity. From its inception in February 2005, the Global 100 Index has outperformed its benchmark (the MSCI All Country World Index) by close to a third with a cumulative return on investment of 163 per cent to end of year 2017.
As the Global 100 ranking is meant to identify those firms best equipped to thrive in the longterm, this year Corporate Knights identified year of origin for all ranked companies. In an era where the average multinational has been around for less than 40 years, the average age of 2018 Global 100 companies was 85 years. Years of origin ranged from 1654 for Orkla ASA of Norway to 2008 for Amundi SA of France. In all, 36 of the 2018 Global 100 companies have been in existence for at least 100 years.
“The Global 100 companies are built to last, demonstrating that firms which adapt to serve societal needs also do well financially,” says Toby Heaps, CEO of Corporate Knights.
On a country-by-country basis, the United States led the way with 18 Global 100 companies. France followed with 15, with 10 from the United Kingdom, and five each from Brazil, Finland and Sweden. This year’s Global 100 were recognized in Davos at a private dinner hosted by Corporate Knights and the United Nations-supported Principles for Responsible Management Education (PRME). The dinner discussion explored the question of how to re-boot MBA schools so they are better preparing graduates for the more holistic demands of business in the 21st century.
Two major advancements were made to the Global 100 ranking methodology this year. First, each key performance metric is now weighted to reflect the relative contribution of the industry in question. The tax metric, for example, was more heavily weighted for industries such as banking that generate a large share of overall profits from which taxes are drawn, whereas the carbon metric was more heavily weighted for industries such as electric utilities that emit a large portion of global emissions. Previously each metric was equally weighted regardless of industry.
The second advancement was to add a clean revenue metric to reflect the beneficial impact of a company’s products and services on the environment. It is calculated using a definition derived from multiple sources applied to a segmented revenue database from FactSet, and confirmed via manual inspection of financial statements.
“Clean revenue exposure is a big driver of both commercial health and contribution to sustainability. It adds an important new dimension to our ranking,” says Michael Yow, research director at Corporate Knights.
For full rankings, methodology details and additional comparators and breakdowns, please visit www.corporateknights.com/global100.
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