Sustainable and socially responsible business practices have become essential for the operation and existence of every company. It can no longer be overlooked if companies want to demonstrate care for the community.
Therefore, ‘generally appealing’ becomes green business, and the Canadian company Corporate Knights (CK), which deals with media, research, and consulting services, has been declaring its Global 100 index of the top 100 green companies in the world for 10 years. This year, at the top of this prestigious ranking, after last year’s second place, is the American biotechnology company Biogen Idec. The top hundred were selected from 4,609 companies from 22 countries, each with a market capitalization (total market value of shares excluding treasury shares) exceeding two billion dollars.
Adjustment to reports
Biogen Idec is followed by the American Allergan, German Adidas, Singaporean Keppel Land, Finnish Kesko, and German BMW. There are twenty companies from the United States on the list, twelve from Canada and France, eleven from the United Kingdom, and five each from Finland and Germany. It is probably surprising that only five companies from Germany made it into the top hundred, but two of them are among the top six, Adidas and BMW.
France has increased its representation from eight to twelve companies in just one year, primarily due to the requirements of the Grenelle II environmental protection law, while the city-state of Singapore contributed four companies. In Singapore, this is also a result of increasingly stringent reporting requirements for companies regarding sustainability, which should gradually lead to the introduction of mandatory reporting laws in two years. China is represented by only one company – Lenovo, which ranks 73rd, continuing the poor impression of local companies that they do not care much about socially responsible business practices.
However, another study by CK Capital, CK’s subsidiary, shows that the situation is changing drastically, so it is possible that more companies from China will soon appear on the list. Also, despite Japan being the third-largest economy in the world, it is represented by only one company, the pharmaceutical Eisai. This is a consequence of insufficient adaptation to global trends.
Among the notable names on the list are, for example, American Johnson & Johnson at 18th place, Coca-Cola at 26th, Intel at 56th, Cisco Systems at 69th, Colgate-Palmolive at 72nd, General Electric at 74th, Campbell Soup at 77th, French L’Oréal at 14th, Renault at 81st, and BNP Paribas at 82nd, German Henkel at 39th, Siemens at 55th, and Daimler at 60th. The British Marks & Spencer Group secured 16th place, Unilever 22nd, Dutch Philips 25th, Finnish Nokia 33rd, Danish Novo Nordisk 13th, South Korean Samsung 45th and LG 51st, and Swedish H&M 75th.
Clean capitalism
The companies come from 42 industries, and as can be seen, none is particularly dominant, but it must be emphasized that the list includes the highest number of banks, as many as 13, and nine oil and gas companies.
The company Corporate Knights publishes a magazine of the same name, calling itself ‘the magazine for clean capitalism’. It tracks business and social trends related to sustainable development, particularly focusing on how companies, governments, and markets respond to the demands of green and clean capitalism. The Washington Post and the Canadian newspaper Globe and Mail distribute around 110,000 copies of CK quarterly, and the magazine is sent via email to business leaders and global political figures. Founded in 2002 and based in Toronto, this company has become a leader in assessing corporate transparency and sustainable business practices. By focusing on monitoring the introduction of a green economy, it aims to demonstrate how large global companies can operate and profit effectively.
Four levels of assessment
The top hundred were selected based on 12 sustainability indicators, such as company revenue per unit of energy consumed, separation of revenue from greenhouse gas emissions and water consumption, lost working time due to injuries, waste disposal, investment in research and development, based on the number of women in high decision-making positions or the ratio of executive salaries to that of the average worker. In fact, the assessment of companies begins with their sustainability reports within their industry. Companies that fail to cover at least 75 percent of the 12 sustainability indicators within their industry are immediately eliminated. Then, economic efficiency and sustainable cash flow are evaluated based on nine criteria. Only those companies that pass the oversight of all products move to the third level, so those with a subset of products named, for example, tobacco, are immediately disqualified from further competition. Finally, the assessment considers how much companies had to pay in fines, settlements, and penalties for environmental pollution in a year. For all industries, the indicators are not valued equally. For example, safety in banks is not rated the same as in companies, say in transportation, where there is a higher risk of workplace injuries and accidents.
