Analysis by Corporate Knights with Thomson Reuters Datastream shows that the average age of a Global 100 company is 87 years, while the average age of companies in the MSCI All Country World Index (ACWI) is 63 years.

And the Global 100 index, which is equally-weighted and mirrors the industry composition of the MSCI ACWI on a percentage basis, outperforms the benchmark, says Corporate Knights CEO and editor-in-chief Toby Heaps. “From inception (February 1, 2005) to December 31, 2018, the Global 100 made a net investment return of 127.35%, compared to 118.27% for the MSCI ACWI,” he points out.

The Global 100 companies have better governance than their peers – they have a lower CEO-to-average-worker pay ratio than the ACWI (76:1 compared to 140:1), an important measure in an age of increasing income inequality and growing concern about it. They also pay more taxes, on average 18% of EBITDA compared to 16%. Companies perceived to be avoiding paying their fair share of taxes through financial engineering are coming under growing pressure from consumers, policymakers and regulators.

The Global 100 firms are greener, too – they have double the carbon productivity (weighted average of $238k in revenue per tonne of CO2e vs. $157k for the MSCI ACWI ETF); and derive much more of their revenues from clean (positive green or social impact) goods and services (26% of total revenues vs. 9%).

They also have more women on their boards (average 27% vs. 19% for the MSCI ACWI ETF); and are more likely, by some distance, to have a link between sustainability measures and executive pay (58% have a link against 19% for the ACWI).

A fifth of the list (20) are IT companies, with the financial sector the second biggest (17 companies), followed by consumer discretionary, health care and industrials. Collectively, these five sectors account for almost three quarters of the Global 100.

While the U.S. is the largest single country represented, with 22 companies, Europe accounts for just over half of the list (52). There are no companies from China or India.

The Global 100 methodology has seen further refinements this year, with all companies ranked against Corporate Knights Industry Group peers based on a modified FactSet taxonomy rather than, as previously, against GICS Industry peers, to allow for better “apples to apples” comparisons.

And this year, half of every company’s score is determined by its clean revenues. Last year, only a few sectors were ranked in this way – energy, utilities and financials – but a fleshed out taxonomy and more complete data now enables all sectors to be evaluated on this basis.

Winner Chr. Hansen is profiled in a separate article, but other stand-out companies include Banco do Brasil (#8), whose US$50 billion green loan book accounts for almost one third of its total loan book – far and away the highest percentage for any bank.

Mining group Teck Resources (#37), traditionally seen as a steel-making coal company, is reinvesting its profits to build up its copper and zinc units, both elements being crucial to the low carbon economy.
Neste (#3), an oil and gas refiner from Finland (one of seven Finnish companies in the index) now earns 25% of its annual US$11.7 billion in revenues from refining biofuels and aims to lift that to 50% by 2020. The company’s five-year return of 328% to September 2018 compares to 7.25% for the S&P Global Oil Index.

Click here to return to the 2019 Global 100 landing page.

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The #MeToo movement has shone a welcome spotlight on gender inequality (while highlighting how much work remains to be done). In Cape Town, the drought and resulting restrictions on water use provided a stark illustration of the growing scarcity of water and its consequences, while the surge in battery production has shone a spotlight on child labour and working conditions in the Democratic Republic of Congo.

A plethora of climate rules and regulations has been introduced over the last year, most successfully in California, which mandated that 100 per cent of its electricity will come from renewable sources by 2045 along with a raft of other measures. But linking a law with climate change doesn’t automatically make it good policy – France’s Emmanuel Macron had to back down on plans to pay for new renewable energy with a carbon tax on fuel.

As Joss Garman of the European Climate Foundation wrote: “Macron’s policy didn’t fail because it taxed carbon. It failed because it was a bad, regressive policy that hit the poorest hardest.”

In the corporate world, there have been some significant breakthroughs, too: Royal Dutch Shell became the first oil and gas company to commit to binding emissions reduction targets; the world’s largest shipping company, Maersk, announced it would be zero-emission by 2050 even as it admitted it did not know how it would get there; one of the biggest carmakers, Volkswagen, announced that its last internal combustion engine car would be launched in 2026.

Meanwhile, the costs of renewable energy and batteries continue to plummet and a growing number of companies have committed to move to 100 per cent renewable electricity or to cut their emissions in line with a 2°C future through initiatives such as RE100 and the Science-Based Targets. For the first time, developing countries installed more renewable energy capacity than fossil fuel power plants this past year, according to Bloomberg New Energy Finance.

The corporate world is increasingly aware of the consequences of failing to deal with environmental, social and governance issues – from the ever-more obvious impacts of climate change, to issues ranging from Facebook’s travails over the use of data and Goldman Sachs’ involvement in the 1MDB scandal in Malaysia, to the sudden need of retailers, food and beverage producers, apparel makers and others to tackle plastic pollution.

In an age of greater transparency, consumers, employees, civil society but especially investors are pressuring companies to act. Shareholders are better informed, better organized and more outspoken than ever before.

In part, this is because they have more data, and new technology such as artificial intelligence, machine learning and big data techniques is enabling them to use it more effectively. But they are working together more, as well, through initiatives such as the Task Force on Climate-related Disclosures and Climate Action 100+, which targets the world’s biggest emitters of greenhouse gases.

It is increasingly clear that performing well on sustainability issues goes hand in hand with financial outperformance, which is why investors and corporations are embracing it more than ever.

Click here to return to the 2019 Global 100 landing page.

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Yet a company whose products are all based on microbes has been named the most sustainable company in the world in Corporate Knights’ Global 100 ranking. Chr. Hansen is a Danish bioscience company that dates back 140 years and “develops natural solutions for the food, nutritional, pharmaceutical and agricultural industries,” the company says.

“We develop and produce cultures, enzymes, probiotics and natural colors for a rich variety of foods, confectionery, beverages, dietary supplements and even animal feed,” adds CEO Mauricio Graber. “Our product innovation is based on more than 30,000 microbial strains that we call ‘good bacteria.’”
Chr. Hansen’s approach to sustainability is based around how it can contribute to the United Nations’ Sustainability Development Goals (SDGs), with 82% of the company’s revenue contributing to the targets.

“We believe the SDGs are a really good framework to translate our business into sustainability impact. We analysed our entire product portfolio to see which of the SDGs we had the most impact on and we decided to focus on three ‘strategic lighthouses,’” Graber says. “These are business areas we see as developing and growingaboth because of the commercial opportunities and the positive impact on the planet and sustainability.”

The first pillar of this strategy is food cultures, with the principal focus on bacteria that reduce food waste by prolonging the shelf life of food products, mainly yogurt and cheese. The company has a target of reducing yogurt waste by 1.2 million tonnes by 2022 from 2015 levels.

The second pillar is plant protection, which links to the SDG of sustainable agriculture. “We provide natural microbial solutions that can be used as an alternative to conventional pesticides while also increasing yields,” the CEO says. “It is much closer to the way that nature intended things and removes the risks and negative impacts of pesticides.”

Chr. Hansen is focusing on the megacrops – corn, sugarcane and soy – because they occupy the most land, but says its products are “crop-agnostic.” It is also working with the Danish Development Agency and Care Danmark on a project in Kenya to see if small-scale farmers can benefit from the same protection.

The third pillar is linked to the SDG of health and wellbeing. Central to this is to promote natural ingredients as a way to help gradually reduce the overuse of antibiotics in livestock farming and the impact of antibiotic resistance through the use of probiotic bacteria.

Chr. Hansen’s probiotics products help infants to develop good gut health, others can shorten the duration of the common cold and influenza-like illnesses. Chr. Hansen is researching how probiotics can help alleviate side effects from regular drugs.

One of the areas in the Global 100 ranking where Chr. Hansen performed particularly well was in the clean revenue category and in the representation of women on the board and in executive positions. It has recently appointed Dominique Reiniche as chairman of the board, making it the first large listed Danish company to have a female chairman. “We are in a growing battle for talent, and we need to improve diversity of all types,” Graber says.

Starting this year, the executive management board’s remuneration is also linked to the company’s targets on diversity, another area where it scored strongly.

Chr. Hansen’s success is based on a strategy of using natural solutions to address some of the key global megatrends, such as increasing food yields, reducing food waste and phasing out antibiotics in animal production, Graber says. “We are just at the start of the era of natural solutions using good bacteria,” he concludes.

Click here to return to the 2019 Global 100 landing page.

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What are the specific metrics/calculations that go into the ranking?

There are a total of 21 performance metrics covering resource management, employee management, clean revenue and supplier performance. The mix and weighting used is tailored to each sector/peer group. See our 2019 Global 100 Methodology for more information.

Is it valid to rank companies from such vastly different sectors against each other?
Rankings are based on high-level metrics – carbon emissions, pay equity and diversity, for example – that are recognized as broadly relevant to corporate sustainability, and that lend themselves to objective measurement. The mix and weighting of metrics is then tailored to each sector/peer group. So while carbon emissions matter to all companies, they have a greater bearing on the ranking of a mining company than of a bank. For the 2019 ranking, further refinements were made to peer group definitions to better ensure they are a basis for apples-to-apples comparisons. A fixed number of slots on the Global 100 is also assigned to each peer group, based on the relative size of its global market capitalization.

What is meant by “clean revenue”, and why does it account for so much of the ranking?
Corporate Knights uses an open-source and evolving taxonomy to define products and services that are socially and environmentally beneficial. This taxonomy is informed by a wide range of research and recommendations drawn from numerous governmental, academic and other sources.  A full list of products and services is available at the “2019 Global 100 methodology” link at: corporateknights.com/reports/global-100/ Generating clean revenue is seen as a strong indicator of both contributions to addressing key social and environmental challenges, and of likely corporate longevity.

Is there an application/nomination process?
No. Corporate Knights conducts the analysis on as comprehensive a basis as possible, including all publicly listed global companies with annual revenues of US$1B or more, and who pass the screening criteria. Qualifying companies do not have to apply or be nominated, and are assessed whether they wish to be or not. No submissions are required, although Corporate Knights offers shortlisted companies an opportunity to validate data. This year, the total sample assessed included approximately 7,500 corporations.

What was the basis for a company’s inclusion on this ranking?

Refer to our spreadsheet providing specific scoring for all ranked companies in 2019. See Global 100 Results (available January 22, 6am GMT +1).

How have companies been ranked in the past?
Rankings from past years are available at: corporateknights.com/reports/global-100/

How do companies compare to their peers?

Peer rankings are available for all ranked companies in 2019. See Global 100 Results (available January 22, 6am GMT +1).

Who is the organization behind the ranking?
Corporate Knights is a publishing and research firm based in Toronto, Canada. It publishes the world’s largest circulating magazine focused on sustainability and responsible business; and its research division develops corporate ratings, and investment product ratings and tools. Its research also powers various external initiatives including the Global Green Financial Index. Corporate Knights was founded in 2002 and is an employee-owned B Corp.

How long has this ranking been in existence?
The Global 100 ranking was first produced in 2005, and has been updated on an annual basis ever since. This most recent ranking is the 15th version to be released.

What makes this ranking credible?
The Global 100 is a comprehensive and well-established ranking, and is closely tracked by institutional investors and other stakeholders interested in corporate sustainability. The methodology is fully transparent and has been continually refined to improve the comparability and precision of the outcomes, and to leverage evolving data availability and understandings of key determinants of corporate sustainability. The Global 100 is based on an objective, replicable assessment of publicly available data, rather than on any subjective determinations. While there are various similar rankings, the Global 100 is distinctive in its scope, and has earned third-party recognition for its rigourousness. A panel of independent experts regularly provides input to guide further refinement of Global 100 methodology.

When does the ranking come out?

The 2019 Global 100 Results  will be available January 22, 6am GMT +1.

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