ANALYSIS

The habits of top ESG performers

The world’s 100 most sustainable companies pay an average of 27 per cent more in taxes, have three times as many top female executives, and generate six times more clean revenue than their global peers.

Analysis of Corporate Knights’ 2018 Global 100 Most Sustainable Corporations draws a direct line between the most sustainable companies and their longevity. The average age of the 2018 Global 100 companies is 85 years, while the average multinational has been around for less than 40 years.

There is also a link between value for society and superior financial performance, with the Global 100 Index outperforming the MSCI All Country World Index by nearly a third since its inception in 2005.

The Global 100 Index is drawn from a pool of 5994 publicly listed companies and assesses them on 17 environmental, social and governance indicators.

The top-ranked entity this year was Dassault Systèmes, the French multinational software company whose digital technologies assist companies and governments in reducing waste, adopting renewables and creating smarter cities. Dassault moved up from 11th place in last year’s list due to strong female representation on its board (six of 11 directors), a relatively low ratio of chief executive-to-average worker pay ratio (30 to 1) and a strong financial contribution to society (it paid taxes equal to 26.5 per cent of EBITDA over the last five years). The company also draws a quarter of its revenue from products and services that preserve the environment.

To put part of this in perspective, JUST Capital in the US reports for Forbes that, among the 728 members of the Russell 1000 for which it has compensation data, the average chief executive’s pay is 204 times what the average worker makes.

The criteria Corporate Knights uses to assess the companies are: energy productivity; carbon productivity; water productivity; waste productivity; research and development revenue; cash/taxes paid ratio; chief executive/average worker pay ratio; pension fund status; injury rate; number of fatalities; employee turnover; women on board; women executives; link between executive compensation and ESG; clean revenue; and clean air productivity.

 

The 14th– annual Global 100 was announced at the World Economic Forum in Davos, Switzerland. Here’s the list:

2018 Global 100 Most Sustainable Corporations in the World

  1. 1  Dassault Systèmes
  2. 2  Neste
  3. 3  Valeo
  4. 4  Ucb
  5. 5  Outotec
  6. 6  Amundi
  7. 7  Cisco Systems
  8. 8  Autodesk
  9. 9  Siemens
  10. 10  Samsung SDI
  11. 11  Aareal Bank
  12. 12  Enbridge
  13. 13  Merck
  14. 14  Natura Cosméticos
  15. 15  Pearson
  16. 16  Amadeus IT Group
  17. 17  Bayerische Motoren Werke
  18. 18  Companhia Energetica de Minas Gerais
  19. 19  Koninklijke Philips
  20. 20  Allergan
  21. 21  Honda Motor
  22. 22  Sanofi
  23. 23  McCormick
  24. 24  Commonwealth Bank of Australia
  25. 25  Vivendi
  26. 26  Intel
  27. 27  Itron
  28. 28  Telefonaktiebolaget LM Ericsson
  29. 29  Halma
  30. 30  Deutsche Börse
  31. 31  Kesko
  32. 32  Télévision Française 1
  33. 33  BioMérieux
  34. 34  AstraZeneca
  35. 35  Nokia
  36. 36  BNP Paribas
  37. 37  Eli Lilly
  38. 38  Storebrand
  39. 39  ABB
  40. 40  Svenska Cellulosa Aktiebolaget
  41. 41  Intesa Sanpaolo
  42. 42  Analog Devices
  43. 43  Applied Materials
  44. 44  Takeda Pharmaceutical
  45. 45  Schneider Electric
  46. 46  Shinhan Financial Group
  47. 47  Kering
  48. 48  Ingersoll-Rand
  49. 49  Banco do Brasil
  50. 50  Nestlé
  51. 51  Legrand
  52. 52  Engie Brasil Energia
  53. 53  GlaxoSmithKline
  54. 54  ING Groep
  55. 55  Sekisui Chemical
  56. 56  Acciona
  57. 57  H & M Hennes & Mauritz
  58. 58  Aberdeen Asset Management
  59. 59  NVIDIA
  60. 60  Daimler
  61. 61  Diageo
  62. 62  BT Group
  63. 63  Singapore Telecommunications
  64. 64  Novartis
  65. 65  Sandvik
  66. 66  Chr. Hansen
  67. 67  Coca-Cola European Partners
  68. 68  Nissan Motor
  69. 69  Texas Instruments
  70. 70  Ørsted
  71. 71  Allianz
  72. 72  Lenovo Group
  73. 73  Telus
  74. 74  Taiwan Semiconductor Manufacturing
  75. 75  MetLife
  76. 76  Banco Santander Brasil
  77. 77  HP
  78. 78  Sun Life Financial
  79. 79  Hewlett Packard Enterprise
  80. 80  National Australia Bank
  81. 81  General Electric
  82. 82  Verbund
  83. 83  AkzoNobel
  84. 84  L’Oréal
  85. 85  AXA
  86. 86  Nordea Bank
  87. 87  Orkla
  88. 88  Wärtsilä
  89. 89  Canadian Imperial Bank of Commerce
  90. 90  Renault
  91. 91  Syngenta
  92. 92  Johnson & Johnson
  93. 93  Posco
  94. 94  Suez
  95. 95  Umicore
  96. 96  Vestas Wind Systems
  97. 97  SSE
  98. 98  CapitaLand
  99. 99  Derwent London
  • 100  City Developments