Yahoo Finance Steel company tops Corporate Knights' Global 100, four Singapore names among world's most sustainable listcos
A dollar invested in an index composed of Global 100 companies on Feb 1, 2005, would have generated a return 1.2 times higher.
Energy companies occupy four of the top 10 most sustainable companies in the world, according to Corporate Knights’ Global 100 rankings for 2023, released on Jan 18.
US-based steel manufacturer and scrap metal recycling company Schnitzer Steel rose to the pole position from #15 in the 2022 ranking after posting 100% sustainable revenue.
Traditionally, the steel industry is one of the biggest contributors to air pollution, owing to the large inputs of coal used in production. According to Corporate Knights, Schnitzer Steel produced steel in electric arc furnaces powered by renewable energy.
The runners-up are last year’s first-place finisher Vestas Wind System, a Danish wind turbine manufacturer; and Australian supply chain logistics company Brambles, which pioneered the use of reusable pallets, crates and containers.
This is the 19th iteration of the annual leaderboard devised by Toronto-based sustainable business research firm Corporate Knights, which quantitatively compares and ranks the world’s largest publicly-traded companies.
This year’s ranking is based on an assessment of 6,720 companies with more than US$1 billion in revenues in FY2021.
Companies were assessed across 25 key performance indicators, including percentage of sustainable revenue, sustainable investment, taxes paid, carbon productivity and racial and gender diversity.
Companies engaging in “red flag” activities such as thermal coal, blocking climate policy and deforestation are disqualified, says Corporate Knights. “Our methodology illuminates the say-do gap. Only those companies making sustainable solutions a core part of their business offerings and allocating meaningful investments to reduce their carbon footprints make the grade.”
According to Corporate Knights, Global 100 companies direct nearly seven times (47% vs 7%) more capital into sustainable investments as a percentage of total investments and generate 10 times (50% vs 5%) more sustainable revenue as a percentage of total revenue compared to the MSCI All Country World Index (ACWI).
The Global 100 Index has also continually tracked higher total returns since its inception in 2005. Even though the Global 100 does not take risk returns into account, it also outperforms every other global sustainability index with at least a 10-year history, including through the turbulence of the last year.
With the Russian attack on Ukraine, oil prices surged to over US$110 per barrel by March 2022, sending oil and gas stocks climbing. Still, the Global 100, with only one oil and gas stock — Neste, the Finnish sustainable aviation fuel manufacturer — outperformed the MSCI ACWI, which holds 6% in oil and gas.
A dollar invested in an index composed of Global 100 companies on Feb 1, 2005, would have generated a return nearly 1.2 times larger than the same investment in the MSCI ACWI, says Corporate Knights, based on a total return of 270.7% compared to 222.1%.
Singapore names rise
Four Singapore-based names feature on this year’s 100 companies.
At #28, City Developments Limited (CDL) is Singapore’s highest-placing name, falling from fifth position last year. That said, CDL remains the world’s most sustainable real estate management and development company, according to Corporate Knights’ ranking.
CDL has pledged that new and existing wholly-owned assets under its direct management and operational control will operate at net-zero carbon and achieve maximum embodied carbon reduction in new developments, compensating for any remaining residual operational and upfront embodied emissions by 2030.
Sherman Kwek, CDL Group CEO, says: “CDL is honoured to be included in the Global 100 Most Sustainable Corporations for the 14th consecutive year. The global climate emergency requires collective action that goes beyond borders and sectors. As the world converges towards its net-zero ambitions, CDL will continue to contribute steadfastly to this global agenda — a sustainability journey we started more than two decades ago.”
Meanwhile, telco StarHub stands at #34, up from #72 last year. In 2022, StarHub achieved 10% renewable energy use through the procurement of Renewable Energy Certificates, and the company has committed to hit 30% by 2030.
StarHub also signed a Virtual Power Purchase Agreement with Terrenus Energy in 2022, and will procure 100% of the renewable electricity to be generated from Terrenus’s 13.2-megawatt (MW) solar farm on Jurong Island over the next 13 years.
“It is truly an honour to be recognised as the world’s most sustainable telco, a testament to the efforts across the whole of StarHub in adopting sustainable practices in all that we do,” says Veronica Lai, chief corporate and sustainability officer, StarHub. “Through our comprehensive suite of connectivity, cloud networks and digitalisation solutions, we empower our customers to lower their carbon footprint, improve operational efficiency and reduce energy costs. Together with our customers and partners, we look forward to taking decisive action to build a smart sustainable city.”
CapitaLand Investment is #56, up from #75 last year and marking its 11th year on the leaderboard.
In 2021, about 4.3% (47,800MWh) of CLI’s total electricity use was from renewable energy sources, which helped to mitigate about 28,960 tonnes of carbon emissions, equivalent to electricity use for over 11,000 average households annually. This was attributed to 21 properties in Singapore, Australia, Belgium, China, India, United Kingdom and seven business parks in India that were fully or partially powered by renewable energy via on-site renewable energy systems or the purchase of full green power or partial green power.
CLI aims to increase its renewable energy consumption to 35% by 2030.
To date, CLI and its listed REITs and business trusts have partnered with 17 financial institutions to secure a total of $11.6 billion in sustainable finance comprising sustainability-linked loans and bonds, green loans, green bonds and perpetual securities. CLI says it will channel interest rate savings obtained from its sustainability-linked loans to fund decarbonisation initiatives and innovations, advancing the transition to a greener future.
Vinamra Srivastava, CLI’s chief sustainability officer, says: “CLI’s consistent inclusion in prestigious indices, such as the Global 100, Dow Jones Sustainability Indices and GRESB, is testament to our global sustainability leadership in real estate. At CLI, we embed sustainability into every stage of our real estate lifecycle. Through key levers such as intensifying the use of renewable energy at our properties, accelerating the adoption of climate technologies and strengthening our sustainable financing efforts, we strive to achieve our ambitious 2030 Sustainability Master Plan targets and Net Zero by 2050. Sustainability is at the core of everything we do, and we will continue to make a positive impact on the communities we operate in.”
Finally, Nasdaq-listed Maxeon Solar Technologies debuts at #69. The Singapore-based solar panel manufacturer is only in its second full year of operations.
“Maxeon supports the clean energy transition by ensuring easy access to highly-efficient solar panels which last longer than any other panel in the industry, reducing demand for new materials and avoiding millions of tons of carbon emissions every year,” says Mark Babcock, interim CEO at Maxeon. “However, we know that renewable generation still needs to be scaled up significantly to fight climate change and ensure a livable future for all.”
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