Stockholm (NordSIP) – A recurring feature at the World Economic Forum is the annual reveal of the world’s 100 most sustainable companies, a ranking compiled by Corporate Knights, a Canadian media and research company. The Global 100 lists the top firms that are increasing their investments in green solutions such as renewable energy, energy efficiency and the circular economy. The Corporate Knights analysts rate companies in 38 industry groups, including banking, utilities, mining, oil and gas, and manufacturing, based on 25 metrics, applying different weighting depending on the nature of the sector. The key measures for all featured companies, however, are their sustainable revenue and sustainable investment.
A look at the very top
This year’s ranking is topped by two Australian companies, Sims Ltd. and Brambles Ltd. The number one company, Sims, recycles scrap metal in 30 countries. The runner-up, Brambles, rents reusable pallets and containers around the globe. Both companies score 100% on sustainable revenue and sustainable investment.
While both winners are prime examples of intentionality, emblematic of the growing number of companies associated with the circular economy, Corporate Knights also acknowledges the achievement of transitioning champions. This year, a “pivot prize” was awarded to Italian energy firm ERG SpA, which, according to the motivation, has completed its multiyear transition from black to green halfway through 2023. ERG had sold off its oil assets in 2013 and announced the divestiture of its gas assets in 2022 but was blocked by Italy’s anti-trust regulator. The company redoubled its efforts to sell its last non-renewable assets and finally sold its gas-fired power plant to Achernar Assets in June 2023. This remarkable success secured ERG 28th place on the 2024 Global 100.
The Nordic leaders
Among Nordic companies, Denmark continues to dominate the ranking. Last year’s number two, Vestas Wind Systems, has, however, dropped down a notch, to third place. Chr Hansen Holding, meanwhile, has improved dramatically since last year to end up in eighth place. Three Danish companies back down: Ørsted remains in the top 50, whereas Novozymes A/S and Coloplast A/S move further down the ranking. One Danish company, Rockwool, has dropped off the Global 100, but another one, Novo Nordisk A/S, appears as number 53.
Finland boasts four companies on the list, including the only oil company in the whole Global 100 ranking, Neste Oyj. This year, Neste has further improved its ranking, climbing to 19th place. Two more Finnish companies have moved up, Kesko and Nordea Bank. Kone has dropped off the list, to be replaced by a newcomer, telecom provider Elisa Oy.
Swedish LM Ericsson has reasons to celebrate, having secured 15th place this year, a remarkable improvement compared to last year’s 65th. Both Essity and Handelsbanken keep their spots among the top 100 despite moving down a notch.
Norwegian Atea continues to move up, to a 41st position this year. Orkla still makes it into the list, unlike another Norwegian company featured last year, Storebrand.
It is encouraging to see two Nordic banks among the only ten that make it into the ranking. However, no asset managers or insurance companies represent the region in the 2024 Global 100. Something to strive towards next time, perhaps?
Powering ahead
“When we launched the Global 100 in 2005, the green economy was a quaint idea,” recalls Corporate Knights co-founder and CEO Toby Heaps. “We did the best job possible with limited qualitative corporate disclosure.” Fast forward twenty years and Heaps sounds excited that these days it is possible to measure most companies’ green business exposure and count annual green investments that run into the trillions, growing six times faster than the economy at large.
A welcome sign that companies are changing course is the fact that in the 2024 Global 100 edition, the top-ranked firms have allocated 55% of their investments to sustainable projects, a significant increase since last year’s 47%. “The fact that these companies are ploughing more money into sustainable capital expenditure and R&D means that we expect them to have higher sustainable revenues in the near future,” says Matthew Malinsky, research manager for Corporate Knights.
Doing well while doing good
Investors and lenders who pay attention to companies’ environmental and social commitments might find it encouraging that the leaders in corporate sustainability featured by Corporate Knights have also provided attractive investment returns over time. Comparing the returns on its Global 100 index against the MSCI ACWI Index, the analysts find that between February 1, 2005, and December 15, 2023, the leaders have returned 287% on a U.S. dollar basis, while the MSCI ACWI had a return of 272%. Meanwhile, the Dow Jones Sustainability World Index posted a return of 254% over that period.
