While congratulating this year’s 100 most sustainable firms in the “noble pursuit of the idea that business can be a force for good,” Prince Charles urgently called for the sort of leadership represented by the Global 100. He warned that the sum of all countries’ carbon reduction commitments won’t come close to limiting rising global temperatures to an average of 2°C – let alone the essential target of 1.5°. “Rather – and this is the problem – they deliver a 3.2°C increase, which means mass extinction and large parts of the planet being uninhabitable by the end of this century.

“As I’ve been trying to say, for more years than I can remember, what on earth is the point of testing this world, and nature, to destruction?”

The prince noted that with “more businesses, investors, shareholders and consumers recognizing the opportunity that a sustainable future affords,” we can shift the momentum of the private sector and capital markets in line with net-zero.

Echoing his message was Sanda Ojiambo, CEO of the United Nations Global Compact, which leads and supports international businesses on their path to sustainability. She noted that 2020 was one of the warmest years on record, with droughts, floods and rising sea levels having catastrophic effects. One bright spot: “Net-zero commitments by the business sector have doubled in the past 12 months.”

Roundtable moderator Diana Fox Carney led the four CEOs in discussing key steps being taken by the leading firms to align with 1.5°C. Asked whether he believed companies would achieve net-zero by 2050, Jean-Pascal Tricoire, CEO of this year’s top firm, France’s Schneider Electric, noted that, globally, “we are not at the right speed at all … The technologies are here, but what we need is to accelerate the way we design things – the way we design factories,buildings, cities – incorporating those existing technologies, because every decision we make counts.”

Tricoire added, “The buildings we build today … will be burning carbon for the next 50 years. Everything we build/do clean today will have implications for the next 50 years.”

Founded in 1836, during the First Industrial Revolution, Schneider develops electrical distribution products (including off-grid solar storage) and smart automation solutions to make the world more energy-efficient and renewable. Tricoire pointed out that when Schneider began to embrace sustainability 15 years ago, “it was a very lone crusade.” But in those 15 years, the company has tripled in size. Action is its own reward, he said: “We reset the bar every three years to a higher level.”

Like Schneider, Danish wind energy giant Ørsted (number two on this year’s Global 100) has also thrived by enabling the world’s broader journey to net-zero. CEO Mads Nipper noted that his firm is proof that change can happen in a blink, even in the dirtiest sectors. “Just 10 years back, we were one of the most coal- and oil-intensive utilities in Europe. We alone accounted for more than one-third of total emissions in Denmark. Since then, we’ve actually reduced our own emissions by 86%, by making a fundamental green transition.”

Founded in 1972 to develop oil and gas deposits in the North Sea, Ørsted is now the world’s largest developer of offshore wind power, producing 88% of its energy from renewable sources. By 2025, says Nipper, the company intends to be the world’s first carbon-neutral utility: “Our vision is a world that runs entirely on green energy.”

Lawrence Kurzius, CEO of McCormick & Co., a global leader in spices, seasoning and “flavour solutions,” agreed that companies can use existing technologies to future-proof their businesses for carbon. As a first step, he said that every new facility McCormick builds is either silver or gold LEED-certified, pointing out that McCormick co-invested in building a solar farm to power its new headquarters in Baltimore, Maryland. “Even though we’re not an energy company, we can certainly source from renewable sources.” Tackling plastic packaging is another key initiative, Kurzius said, adding that McCormick has made a commitment to go 100% circular. Today, 84% of McCormick’s plastic can be recycled, reused or repurposed.

As the top-ranked food company on the Global 100, McCormick has put sustainable farming at the heart of its net-zero plans. The company is leveraging new technology to work with hundreds of thousands of small farmers in 80 countries to help them develop sustainable farming practices – in some cases organizing the farmers into agricultural co-ops and committing to take the co-ops’ full outputs. “I think that that really multiplies the efforts that we undertake ourselves,” Kurzius said.

Roberto Marques, CEO of Brazil-headquartered conglomerate Natura & Co., spoke of sourcing ingredients while preserving the Amazon rainforest by working with the local communities as “guardians of the forest.” Last year, the personal-care company, whose brands include Avon and The Body Shop, committed to being net-zero by 2030 throughout its supply chain, including Scope 3 emissions (those created through use of its products) – “a daunting ambition for us,” Marques said. Natura is also targeting “full circularity” for its packaging by 2030 and intends that by then 95% of its products will be natural, renewable and biodegradable. “We don’t have all the answers today,” he said. “It’s a call to action – for society, for our partners, for the entire community.”

Challenging targets produce results, Marques said: they capture people’s imaginations and spur innovation and collaboration. “We truly believe that by setting the bar high you end up driving innovation. At the end of the day, I don’t think there is room for even competition or political agenda when humanity is at risk.”

Collaboration was at the heart of Prince Charles’s message as well. “For the sake of a safer and more sustainable future, let us join forces and waste no more time. As each of you continues your heroic efforts as members of the Corporate Knights Global 100, I can only offer you my sincere congratulations and ask that you keep going, demonstrating the leadership the world so desperately needs.”

In the spirit of enshrining the rights and value of nature in capitalism, Corporate Knights is inviting the leaders of Global 100 companies to support the Terra Carta, a bold new climate action charter from the Prince’s Sustainable Markets Initiative.

“We are moving more quickly than we were before, but we really need to speed up,” Corporate Knights publisher Toby Heaps said in conclusion. “The good news is the solutions are on the shelf; they’re waiting for all of us to make the bold, smart choices to invest in them.”

Rick Spence is a business writer, speaker and consultant in Toronto specializing in entrepreneurship, innovation and growth. He is also a senior editor at Corporate Knights.

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But in fact, as Gilles Vermot Desroches, senior vice-president for sustainable development and strategy at this year’s most sustainable corporation, Schneider Electric, says, “the opposite is true.” Rather than abandon sustainability pledges, governments around the world have seized on the opportunity presented by the need to kick-start their economies to inject trillions of dollars of green investments into their stimulus plans.

The European Union, for example, has committed almost €550 billion to green projects over the next seven years, almost a third of its recovery package, while President Joe Biden has pledged to spend US$2 trillion on tackling climate change. There have also been notable commitments from China, Japan and South Korea to become net-zero economies, offering a clear sign of increased ambition in Asia that should transform the investment landscape in the region.

It’s not just national governments taking action; the number of companies and municipalities signing on to net-zero has more than doubled since last year. This year has also seen the launch of a $5-trillion Net Zero Asset Owner Alliance and a $9-trillion Net Zero Asset Managers initiative, whose members have committed to decarbonizing their portfolios in line with global efforts to limit warming to 1.5°C.

This shift in attitudes has come about in part because of the astonishing fall in the costs of renewable energy, which is now the cheapest source of new power in many parts of the world. From 2009 to 2019, the cost of solar fell 89%, as did batteries, while onshore wind is 70% cheaper.

With increasing evidence of the harm that climate change can cause, from devastating wildfires in Australia and California to heat waves in the Arctic, another driver is the growing concern from consumers and voters, epitomized by the school strikes for climate, inspired by Greta Thunberg, and the Extinction Rebellion movement.

At the same time, the Corporate Knights Global 100 index continues to demonstrate that sustainability is good business and enables companies to outperform their peers.

From its inception on February 1, 2005, to December 31, 2020, the Global 100 index has generated a total return of 263% versus the 220% increase of its benchmark, the MSCI ACWI (All Country World Index). For the calendar year 2020, the Global 100 was up 26% compared with a rise of 16% for the MSCI ACWI.

Members of the Global 100 earn 41% of their revenues from products or services aligned with the UN Sustainable Development Goals, according to the Corporate Knights Clean Taxonomy, compared to just 8% for MSCI ACWI companies on a weighted basis.

Global 100 companies are also more gender-diverse than their peers, with almost a third of board directors (32%) being non-male against 24% for MSCI ACWI companies.

Rising from 29th spot last year, Schneider Electric was one of several top 10 companies in this year’s index that jumped significantly from 2020. Last year’s winner, Ørsted, dropped one spot to No. 2, followed by Banco do Brasil (No. 9 last year); Finnish oil refiner Neste also dropped one place, to No. 4. American food company McCormick jumped from 22 to No. 6, while Canadian National Railway moved up to No. 10 from 54.

Highlighting the speed at which fortunes can change, 26 companies left the index, including Toyota, which was weighed down by its dependence on internal-combustion-engine vehicles, and chemicals giant BASF, flagged by U.K.-based InfluenceMap for lobbying against measures to combat climate change.

In a year dominated by the global pandemic, pharmaceutical group AstraZeneca, whose low-cost, easy-to-store COVID-19 vaccine could provide a real boost to efforts to conquer the virus, is a notable presence on the index.

There is also a growing number of Global 100 companies in the green building and real estate space, such as Owens Corning, Trane Technologies, Prologis and Singapore’s CapitaLand and City Developments. They complement the usual suspects in green infrastructure: along with Schneider, also represented are Siemens, Johnson Controls, Rexel, American Water Works and ABB.

Companies such as Ørsted, Iberdrola and Verbund demonstrate that green energy majors are becoming increasingly established in mainstream energy markets, particularly in Europe.

The presence of companies such as Quebec-based Cascades and Transcontinental and U.S.-headquartered Ball Corporation show that packaging is one of the first areas where the circular economy is gaining traction.

The Global 100 list continues to be dominated by companies from North America and Europe, but there are new entrants from India (Tech Mahindra) and Turkey (appliances and homeware group Arcelik, that country’s first representative). On an individual country basis, the U.S., with 20 companies, and Canada, with 13, are the best represented, but regionally, Europe continues to dominate the Global 100 with almost half the companies (46) to North America’s 33. The Asia Pacific region hosts 17 of the index’s members, while Latin America (two), Africa (one) and the Middle East (one) continue to lag.

The Global 100 illustrates just how much sustainability is a field independent of economic might, where Denmark and Finland (both five members each) rank higher than China, which has just two companies on the index.

This year, we introduced several new key performance indicators (KPIs) when selecting the index’s constituents, reflecting not just the ongoing importance of tackling the climate crisis but also some of the social concerns that the pandemic and Black Lives Matter highlighted during 2020. These include paid sick leave, executive and board racial diversity, and clean investments (including clean capital expenditures, R&D and acquisitions). Corporate Knights found that the average clean investment for Global 100 companies was 33%, compared to 22% for the 8,080 companies analyzed for the ranking. As well, 86% of Global 100 firms offer at least 10 days of paid sick leave, compared to just 41% of the 8,080 assessed.

Sustainable firms also have longer lifespans: analysis by Corporate Knights with Thomson Reuters Datastream shows that the average age of a Global 100 company is 74 years, versus 53 for companies in the MSCI All Country World Index.

Notably, 60 of the Global 100 companies have signed on to the Science Based Targets Initiative to reduce their emissions in line with a 1.5°C future.

Sustainability is now central to doing business, as the Global 100’s continuing superior performance shows, but the introduction of our new KPIs highlights that it is always evolving – and companies must evolve with it.

Mike Scott writes on business, finance, clean energy and sustainability.

Find out how this year’s Global 100 companies ranked:

The 2021 Global 100 Ranking

Return to Global 100 home page

Be sure to attend today’s 17th Annual Global 100 Launch 

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