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How many top100 sustainable companies do you invest in?

The most sustainable 100 companies in the world, as measured by Corporate Knights, outperformed the MSCI by 12.4 per cent since the list’s inception in February 2005, it was announced at Davos last week.

From February 1, 2005, to December 31, 2011, the “Global 100 Most Sustainable Corporations” list has achieved a total return of 41.7 per cent, outperforming the MSCI All Country World Index, which returned 29.30 per cent over the same time period.

The list is compiled by assessing 11 key performance indicators (listed below) including linking senior executive pay to remuneration.

Chief executive of Corporate Knights, Toby Heaps, says the Global 100 shows it is now possible to score companies on clean capitalism criteria with a quantitative approach.

He says a minor revolution due to more readily available ESG data, combined with the industry group comparison synthesis his company uses, removes a crucial barrier that has been preventing institutional investors from integrating ESG into their passive strategies.

This year the number one ranked company in the global 100 was the Danish Novo Nordisk, which is the only pharmaceutical company in the list to report the link between CEO remuneration and corporate performance on clean capitalism KPIs.

Chief executive of Corporate Knights, Toby Heaps, says: “The Global 100 companies serve as ambassadors for a better, cleaner kind of capitalism which, it also turns out, is more profitable.”

“Employee turnover” was included as a new indicator for the first time this year.

It is the eighth year annual list of the most sustainable large corporations in the world, and this year the companies were recognised at the Davos World Economic Forum at a private dinner hosted by Corporate Knights and Inflection Point Capital Management.

Heaps says the mission of CK Capital, which provides a suite of products based on the passive methodology, has a seven-year goal to enable $1 trillion of assets to be optimised to clean-cap, volatility-reducing criteria.

Global 100 Key Performance Indicators Definitions
• Energy productivity ($) – sales ($) / total direct and indirect energy consumption (gigajoules)
• Carbon productivity ($) – sales ($) / total CO2 and CO2 equivalents emissions (tonnes)
• Water productivity ($) – sales ($) / total water use (cubic meters)
• Waste productivity ($) – sales ($) / total amount of waste produced (tonnes)
• Leadership diversity – percentage of women board directors
• CEO-to-average worker pay – ratio of highest paid officer’s compensation to average employee compensation (three-year average)
• Percentage tax paid – percentage reported tax obligation paid in cash (three-year average)
• Safety productivity – sales ($) / lost-time incidents*$50k and fatalities*$1M)
• Sustainability remuneration – whether or not at least one senior officer has his/her pay linked to sustainability
• Innovation capacity – R&D/sales (three-year average)
• Employee turnover – total number of employees who leave the organisation voluntarily or due to dismissal, retirement, or death in service as a percentage of the total employee numbers at the end of the reporting period.

For the full list of the most sustainable companies click here: http://www.global100.org/annual-lists/2012-global-100-list.html



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