Belgium‐based materials technology and recycling company Umicore topped the annual list of sustainable companies produced by Toronto-based investment research firm Corporate Knights.
The Global 100 list was unveiled at the World Economic Forum in Davos, Switzerland this week. Natura Cosmeticos, Statoil, Neste Oil and Novo Nordisk rounded out the top five. (Novo Nordisk held the top spot on the 2012 list.)
The Global 100 consists of the 100 top‐performing stocks worldwide on a range of sector‐ specific sustainability metrics. In aggregate, the Global 100 had revenues of US$3 trillion (roughly 4.5 percent of global GDP) and a workforce of nearly 5.3 million in 2011.
Umicore derives the majority of its revenue (2011: US$20 billion) from clean technologies such as catalysts that reduce pollution from vehicles powered by internal combustion engines. Corporate Knights said the company achieved the top overall ranking in the 2013 Global 100 due to its strong, across‐the‐board sustainability performance. The company notched top‐quartile performance on six of the 12 indicators used in the project, including carbon and water productivity, and employee turnover.
Canada and the United States led the way in country representation, each with 10 constituents on the list, followed by Australia, Britain and France, each with 9 constituents. Overall, the Global 100 drew companies from 22 countries on six continents.
“The Global 100 is one of the few equity indexes that we are aware of that has outperformed the MSCI All Country World Index (ACWI) — the Global 100’s benchmark — by over 900 bps over the last 8 years. It turns out that our methodology for stock selection in the Global 100 is a strong proxy for corporate operational efficiency, which has been an increasingly important driver of stock returns in recent years,” Doug Morrow, the VP Research at Corporate Knights, said.
Corporate Knights collected data for the project primarily from Bloomberg and through direct engagement with the 350 companies that made the project’s shortlist, selected from the project’s starting universe of all global mid and large cap stocks (numbering approximately 4,000).
The Global 100 uses a two‐step methodology. First, companies from the starting universe are screened according to their sustainability disclosure practices, financial health, product types and recent legal payouts. Those companies that remain are then scored, relative to their same‐sector peers, on a set of key performance indicators (KPIs). A different suite of KPIs is used for companies in each industry, depending on recent reporting trends in each industry group.
“The Global 100 are leading a resource productivity revolution, transforming waste into treasure and doing more with less. They are steering our civilization away from ecological overshoot and back to a place of balance with our planet,” Toby Heaps, CEO of Corporate Knights, said.
“On carbon, water, energy, and waste, the Global 100 are on track to double their resource productivity by 2025 in two‐thirds of the cases, and in an era of peak commodity prices, this makes as many dollars as it does sense,” added Heaps.
@Bart_King is a freelance writer and communications consultant.