The Global 100 list: How the world’s most sustainable corporations are driving the green transition

The 2024 Global 100 companies earned 51% of their revenues from sustainable sources in the fiscal year 2022, up from 50% the prior year. That compares with just 16% for the broader universe of companies. 

“Sustainable investment data identifies those companies that are going to be poised to succeed in the transition to a low-carbon economy,” Malinsky says. “We can see which of these companies are going all in on sustainable investment and have watched the ratio grow for some of these companies from 20, to 30, to 50% over a three-year period.”

Two Australian companies, Sims Ltd. and Brambles Ltd., top the 2024 ranking. Sims, this year’s number one company, recycles scrap metal in 30 countries, and Brambles rents reusable pallets and containers around the globe. Both companies score 100% on sustainable revenue and sustainable investment.

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Malinsky says that the success of Sims and Brambles is emblematic of the growing number of companies associated with the circular economy, in which waste streams are recycled into new products. 

Two decades of Global 100 versus benchmark

The Global 100 also awarded a “pivot prize” to Italian energy firm ERG SpA, which completed its multiyear transition from black to green halfway through 2023. ERG had sold off its oil assets in 2013 and announced the divestiture of its gas assets in 2022 but was blocked by Italy’s anti-trust regulator. The company redoubled its efforts to sell its last non-renewable assets and finally sold its gas-fired power plant to Achernar Assets in June 2023. 

“With this operation we complete the path of transformation towards a pure wind and solar business model,” ERG CEO Paolo Merli said in a statement. 

ERG landed in 28th place on the 2024 Global 100 and will no doubt move up the rankings next year.

As its chair Edoardo Garrone said in a statement to investors, “We have shown that the transition to a sustainable business model is possible and profitable.”

 Among the Canadian firms to make the Global 100 are engineering firms Stantec of Edmonton and WSP Global, based in Montreal. First-time Canadian entries include Ontario’s transmission company Hydro One and life insurance giant Manulife Financial Corp., which joins its competitor Sun Life Financial Inc. on the list.

We have shown that the transition to a sustainable business model is profitable and possible.

 

-Edoardo Garrone, chair, ERG

The Global 100 rates companies in 38 industry groups, including banking, utilities, mining, oil and gas, and manufacturing, based on 25 metrics. It applies different weighting to certain metrics given the nature of the sector. Sustainable revenue and sustainable investment are key measures; others include gender and racial diversity, CEO pay versus employee average, CEO bonuses based on sustainability performance, taxes paid and contributions to employee pensions.

The Global 100 score far better on overall environmental, social and governance (ESG) metrics than do their peers. For example, 79% of Global 100 firms had sustainability-linked pay; only 30% of the broader corporate universe linked executive pay to the achievement of environmental or social sustainability targets.

It is a similar story for gender and racial diversity, though the difference is less stark. Some 35% of Global 100 boards of directors are gender diverse, while 25% of the broader peer group had gender-diverse boards. (Manulife was a leader with 58.3 % of its board listed as gender diverse.)

Racial diversity continues to lag both in the Global 100 group and the larger universe of companies. Only 13% of Global 100 company board directors were racially diverse compared to 10% for the larger cohort. 

All told, 10 global banks are represented in the Global 100, reflecting the large presence of financial institutions on the All Country World Index (MSCI ACWI) of publicly traded companies. The 10 banks on the Global 100 are leaders in their sector.

While the two Canadian life insurance companies made the cut, no Canadian bank did. In fact, Bank of Montreal fell out of the ranking after making it last year. The Bank of Montreal “has been pretty stagnant over the last few years in terms of their exposure to sustainable financing,” Malinsky says. 

Stagnation helps explain why a number of other companies fell off the list this year – to remain leaders, corporations need to continue to up the ante. “A number of other banks in the universe have seen their proportion of sustainable revenues earned from sustainable financing activities grow quite significantly, ” Malinsky adds.

As leaders in corporate sustainability, the Global 100 companies have also provided attractive investment returns for their shareholders. Corporate Knights compared the returns on its Global 100 index against the MSCI ACWI Index.

Between February 1, 2005, and December 15, 2023, the Global 100 saw a return of 287% on a U.S. dollar basis, while the MSCI ACWI had a return of 272%. The Dow Jones Sustainability World Index posted a return of 254% over that period.

The profitability of and solid investment returns from sustainability leaders are critical signals to the laggards that doing well can go hand in hand with doing good. And indeed, a growing number of investors are demanding greater transparency on data in order to align their investment and underwriting with their environmental and social commitments. 

Nowhere is that more true than with regard to climate change and the clean energy transition. Leaders in the transition will be rewarded and laggards penalized as the growing crisis drives governments and businesses alike to reassess their strategic interests and align their plans with a net-zero world.