The global pandemic continued to highlight society’s inequalities in 2021, while heat waves, wildfires and floods reminded us of the urgency of the climate crisis. It was a year when environmental, social and governance (ESG) issues took centre stage in business, government and all walks of life. Approximately 90% of countries are now covered by some kind of net-zero target, as are hundreds of the largest publicly traded companies. At November’s UN climate summit, US$130 trillion of assets were committed to this goal.
Again this year, the Corporate Knights Global 100 most sustainable corporations are progressing faster than their peers. Members of the MSCI All Country World Index (ACWI), a global equity index, derive just 30% of their earnings from products or services aligned with the Corporate Knights Clean Taxonomy, while 47% of the Global 100 do so (up from 41% last year). Crucially, Global 100 companies are also investing more aggressively in clean technologies and services, with 48% of their capital expenditures, R&D and acquisitions going to clean investments, versus 34% for ACWI.
This is reflected in their performance. Since the market bottomed in the spring of 2020, the Global 100 has made gains of 22% against the ACWI, reflecting investors’ focus on a green recovery. Since its inception on February 1, 2005, the Global 100 Index has generated a total investment return of 331% compared to 279% for ACWI.
As the “decade of action” on decarbonizing the economy kicks off in earnest, the most sustainable companies are more productive in terms of both carbon and energy. Compared to the average ACWI firm, Global 100 members generate more than four times the output per tonne of carbon emitted and almost eight times more output per unit of energy consumed.
In 2021, 60 of the Global 100 companies signed up to the Science Based Targets initiative, aligning their emissions reductions with the requirements of the Paris Agreement. This year, that figure inched ahead to 65. And while non-Global 100 companies increased their clean investments from 22% in the 2021 ranking to 34% this year, the Global 100 poured, on average, 48% of their investments into clean activities, up from a third a year ago.
% of earnings that Global 100 firms derive from clean products and services, compared to 30% for benchmark.
Global 100 companies also outperform on other parameters, including sick pay: 82% of constituents offer at least 10 days of paid sick leave, compared to 74% of the ACWI. The ratio of CEO pay to that of the average worker is also lower in Global 100 firms, at 111:1, while at other companies, the pay gap has grown from 124:1 to 140:1, extending the gulf between executives and workers. And while 87% of Global 100 companies link executive compensation to meeting sustainability targets, up from 80% last year, the proportion of companies in the benchmark index may have more than doubled, but that is from just 14% last year to 34% this year.
On diversity, the differences are less clear-cut. In Global 100 companies, on average, 32% of directors are non-male, the same as last year, while for the ACWI the proportion has improved from 24% to 30%. When it comes to diversity of leadership, 13% of Global 100 company board members and 12% of executives are racially diverse.
One area where Global 100 firms do not outperform the benchmark is in paying tax: both the Global 100 and the ACWI pay 13% tax.
Corporate Knights introduced a letter grade system this year that gives Global 100 companies marks ranging from A+ to D–. These grades were converted from companies’ overall scores, based on Corporate Knights’ 23 key indicators. Every company that makes the Global 100 has sustainability practices well above average: the letter grades reflect companies’ standings relative to other high-performance companies.
While banks comprise a 10th of this year’s index, it is tech groups of all varieties that dominate, including telecoms, chipmakers, computer makers and business service providers. There are 17 new members of the Global 100, including U.S.-listed Evoqua Water Technologies and Beijing Enterprises Water Group, highlighting the growing importance of water issues around the world. The latter was one of a number of Chinese companies joining the index, including Xinyi Solar Holdings and LONGi Green Energy, perhaps indicating that sustainability is starting to take hold in the world’s largest carbon emitter. Another interesting addition is Schnitzer Steel Industries, a specialist in steel and auto recycling. The circular economy will be an increasing focus for many sectors in years to come.
Since its inception on February 1, 2005, the Global 100 Index has generated a total investment return of 331% compared to 279% for ACWI.
The longest-running company on the Global 100 is Finnish retailer Kesko, which has been on the Global 100 since 2005. The index was dominated by companies from Europe (41) and the Americas (39), with 20 constituents from the Asia Pacific region.
Meanwhile, the companies that dropped off the list illustrate how sustainability requirements are always increasing and changing. Valeo no longer makes the cut because it saw a significant drop in its clean revenue and investment, as most of its products go into hybrids, which no longer count as clean under the new taxonomy, rather than battery electric vehicles.
A number of high-profile names were excluded from the Global 100 because of specific red-flagged activities, such as weapons production (including Airbus, Rolls-Royce Holdings and Boeing) and climate policy blocking (Ford Motor Company, Daimler AG, Chevron and Air France).
It was also a year that put the complexities of the sustainability agenda into sharper focus; some members of this year’s list performed well in certain areas but showed clear shortcomings elsewhere. Tech giants Apple and Google, for example, were both hit with significant antitrust fines in Europe, but Apple scored well on energy, carbon, clean revenue and diversity, while Google performed strongly on clean revenue and racial diversity. Canadian mining firm Teck Resources agreed to pay the highest pollution fines ever given out by Fisheries and Oceans Canada in 2021 as a settlement for selenium releases at its metallurgical coal operations; nonetheless, the company sits in 74th spot because of its top-quartile performance on clean revenue and investment in clean economy minerals such as copper and zinc, as well as pension fund quality and boardroom racial diversity.
Banco do Brasil is heavily invested in Brazil’s carbon-intensive beef and timber industries, but as a sustainable finance leader, it screens those investments for responsible practices. It scores well in areas such as energy productivity, taxes paid, clean revenue and CEO pay ratio.
The last 12 months have shown that sustainability is a constantly evolving concept, and even the most diligent companies must evolve with it.
Mike Scott writes about business, finance, clean energy and sustainability.
Corporate Knights’ 2022 ranking of the world’s 100 most sustainable corporations is based on a rigorous assessment of nearly 7,000 public companies with revenue over US$1 billion.
|2022 G100 Rank||2021 G100 Rank||Company||Country||Climate commitments||Overall Score|
|1||21||Vestas Wind Systems A/S||Denmark||1.5°C, SBTi||A+|
|2||24||Chr Hansen Holding A/S||Denmark||1.5°C, SBTi||A|
|3||43||Autodesk Inc||United States of America||SBTi||A|
|4||1||Schneider Electric SE||France||1.5°C, SBTi||A|
|5||40||City Developments Ltd||Singapore||1.5°C, SBTi||A|
|6||9||American Water Works Company Inc||United States of America||A|
|7||2||Orsted A/S||Denmark||1.5°C, SBTi||A-|
|8||12||Atlantica Sustainable Infrastructure PLC||United Kingdom||SBTi||A-|
|9||55||Dassault Systemes SE||France||1.5°C, SBTi||A-|
|10||18||Brambles Ltd||Australia||1.5°C, SBTi||A-|
|12||38||Johnson Controls International PLC||Ireland||1.5°C, SBTi||B+|
|12*||7||Kering SA||France||SBTi, FCCA||B+|
|13||93||Koninklijke KPN NV||Netherlands||1.5°C, SBTi||B+|
|14||6||McCormick & Company Inc||United States of America||SBTi||B+|
|15||Schnitzer Steel Industries Inc||United States of America||B+|
|17||5||Stantec Inc||Canada||1.5°C, SBTi||B+|
|19||Evoqua Water Technologies Corp||United States of America||SBTi||B+|
|20||Beijing Enterprises Water Group Ltd||Hong Kong||B+|
|21||3||Banco do Brasil SA||Brazil||1.5°C, SBTi||B+|
|22||51||Sekisui Chemical Co Ltd||Japan||1.5°C, SBTi||B+|
|23||Engie Brasil Energia SA||Brazil||B+|
|25||19||Iberdrola SA||Spain||1.5°C, SBTi||B+|
|26||70||Xerox Holdings Corp||United States of America||SBTi||B|
|27||Salesforce.Com Inc||United States of America||1.5°C, SBTi||B|
|28||13||Cisco Systems Inc||United States of America||1.5°C, SBTi||B|
|31†||Legrand SA||France||1.5°C, SBTi||B|
|32||16||Eisai Co Ltd||Japan||1.5°C, SBTi||B|
|33||Ecolab Inc||United States of America||1.5°C, SBTi||B|
|34||Canadian Pacific Railway Ltd||Canada||SBTi||B|
|35||36||Novozymes A/S||Denmark||1.5°C, SBTi||B|
|36||90||Alphabet Inc||United States of America||B-|
|38||95||Workday Inc||United States of America||1.5°C, SBTi||B-|
|39||SunPower Corp||United States of America||B-|
|40||8||Metso Outotec Corp||Finland||SBTi||B-|
|41||29||IGM Financial Inc||Canada||NZAM||B-|
|42||Xinyi Solar Holdings Ltd||China||B-|
|43||Sprouts Farmers Market Inc||United States of America||B-|
|45||62||Vitasoy International Holdings Ltd||Hong Kong||B-|
|46||60||Samsung SDI Co Ltd||South Korea||B-|
|47||LONGi Green Energy Technology Co Ltd||China||1.5°C, SBTi||B-|
|48||Apple Inc||United States of America||1.5°C, SBTi||B-|
|49||54||Telus Corp||Canada||1.5°C, SBTi||B-|
|50||50||HP Inc||United States of America||1.5°C, SBTi||B-|
|52||97||Tesla Inc||United States of America||1.5°C, SBTi||B-|
|53||41||Konica Minolta Inc||Japan||SBTi||B-|
|54||30||Hewlett Packard Enterprise Co||United States of America||1.5°C, SBTi||C+|
|55||84||SAP SE||Germany||1.5°C, SBTi||C+|
|55*||14||Storebrand ASA||Norway||1.5°C, SBTi, NZAM, NZAO||C+|
|55*||69||Sun Life Financial Inc||Canada||NZAM||C+|
|56||Koninklijke Philips NV||Netherlands||1.5°C, SBTi||C+|
|57||34||Arcelik AS||Turkey||1.5°C, SBTi||C+|
|58||Citrix Systems Inc||United States of America||SBTi||C+|
|60||67||Commerzbank AG||Germany||SBTi, NZAM, NZBA||C+|
|61||37||ING Groep NV||Netherlands||NZAM||C+|
|63||88||Henkel AG & Co KgaA||Germany||1.5°C, SBTi, NZAM||C+|
|64||59||Intel Corp||United States of America||C+|
|66†||77||Prologis Inc||United States of America||SBTi||C+|
|67||65||Sanofi SA||France||1.5°C, SBTi||C+|
|68||74||Analog Devices Inc||United States of America||1.5°C, SBTi||C+|
|69||87||Kesko Oyj||Finland||1.5°C, SBTi||C+|
|70||86||Nordea Bank Abp||Finland||NZAM, NZAO, NZBA||C+|
|71||44||National Australia Bank Ltd||Australia||C+|
|73||92||Industria de Diseno Textil SA||Spain||SBTi, FCCA||C+|
|74||91||Teck Resources Ltd||Canada||C|
|75||58||CapitaLand Investment Ltd||Singapore||SBTi||C|
|76||46||BNP Paribas SA||France||SBTi, NZAM, NZAO, NZBA||C|
|77||Puma SE||Germany||SBTi, FCCA||C|
|78||79||Unilever PLC||United Kingdom||1.5°C, SBTi||C|
|79||Gildan Activewear Inc||Canada||C|
|80||47||Bank of Montreal||Canada||NZAM, NZAO||C|
|81||68||Cogeco Communications Inc||Canada||1.5°C, SBTi||C|
|82||76||Adidas AG||Germany||SBTi, FCCA||C|
|83||Coloplast A/S||Denmark||1.5°C, SBTi||C|
|84||35||BT Group PLC||United Kingdom||1.5°C, SBTi||C-|
|86†||73||Agnico Eagle Mines Ltd||Canada||C-|
|87||78||Lenovo Group Ltd||China||SBTi||C-|
|88||42||Natura & Co Holding SA||Brazil||1.5°C, SBTi||C-|
|89||Campbell Soup Co||United States of America||SBTi||C-|
|90||56||Intesa Sanpaolo SpA||Italy||NZAM, NZAO, NZBA||C-|
|91||82||AstraZeneca PLC||United Kingdom||1.5°C, SBTi||C-|
|92||KBC Groep NV||Belgium||C-|
|93||49||Allianz SE||Germany||SBTi, NZAM, NZAO||C-|
|94||Aster DM Healthcare Ltd||India||D+|
|95||89||Telefonaktiebolaget LM Ericsson||Sweden||1.5°C, SBTi||D+|
|96||75||Pearson PLC||United Kingdom||1.5°C, SBTi||D+|
|97||Biogen Inc||United States of America||1.5°C, SBTi||D+|
|98||99||Canadian Tire Corporation Ltd||Canada||D|
|99||LG Electronics Inc||South Korea||1.5°C, SBTi||D|
|100||94||Byd Co Ltd||China||D-|
† Rank 30 and 85 updated due to data correction
Download the complete 2022 Global 100 Excel scorecard:
|Business Ambition for 1.5C||1.5°C|
|Science Based Targets initiative||SBTi|
|Fashion Charter for Climate Action||FCCA|
|Net-Zero Asset Managers Initiative||NZAM|
|Net-Zero Asset Owners Alliance||NZAO|
|Net-Zero Banking Alliance||NZBA|