Evolving ESG Expectations Shape World's Most Sustainable Corporations Ranking for 2022
TORONTO, Jan. 19, 2022 /CNW/ - Corporate Knights' 18th annual ranking of the world's 100 most sustainable corporations shows a continued correlation between higher investor returns and strong performance on key environmental, social and governance (ESG) metrics. It also sheds light on the evolution of ESG priorities and outcomes, and on the extent of the gap between leading sustainability performers and their global corporate peers.
The ranking is based on a rigorous assessment of 6,914 companies with more than US$1 billion in revenues, out of which Vestas Wind Systems of Denmark emerged as the world's most sustainable corporation.
Vestas has elevated its sustainability performance significantly since the introduction of its sustainability strategy back in 2020. Amongst a broad range successfully implemented sustainability initiatives, Vestas has introduced a circularity roadmap and governance structure, and had its carbon emissions reduction targets validated as in line with the 1.5 degree scenario of the Paris Agreement by the Science Based Targets initiative. At present, Vestas is responsible for nearly one third of globally installed wind power capacity.
"As the global leader in sustainable energy solutions we are honoured to be recognized as the most sustainable company in the world in 2022," says CEO Henrik Andersen. "We have mobilised our entire organisation around several key sustainability activities, and this award is a testament to both our existing achievements, and our ongoing progress in ensuring sustainability in everything we do.
"Through our solutions, Vestas supports the global energy system with avoiding millions of tons of carbon emissions every year. To build a truly sustainable future however, we must do more. Accelerating the energy transition by scaling up renewable energy is critical to address the climate crisis, and at Vestas, we are dedicated to driving this transformation in partnership with all our stakeholders."
According to analysis by S&P Capital IQ, the Corporate Knights Global 100 Index is the best performing global sustainability equity index since its inception in 2005and is also ahead of its blue-chip benchmark. A dollar invested in an index composed of Global 100 companies on February 1, 2005, would have generated a return nearly one-fifth larger than the same investment in the MSCI All Country World Index, or ACWI (total return of 331% compared to 279%), with the performance gap widening in favour of the Global 100 markedly after the onset of COVID as large green recovery programs were adopted.2
The 2022 Global 100 companies derive 47% of their earnings from products or services categorized as "clean" under the Corporate Knights Clean Taxonomy, and they direct 48% of their capital expenditures, R&D and acquisitions to clean investments.
Compared to the average ACWI firm, Global 100 members generate more than four times as much revenue per tonne of carbon emitted and almost eight times more output per unit of energy consumed.
"Strong performance on these metrics is foundational to achieving a clean and carbon-neutral economy in the necessary time frame," says Corporate Knights CEO Toby Heaps, "and the sustained momentum is encouraging."
While Global 100 companies made progress boosting their share of clean revenues and investments, non-male representation among directors stalled this year at 32%. And there was middling performance on percent of taxes paid, with cash taxes paid being 13% of profit ratio over the past five years, in contrast to average global statutory rates that are double that. This suggests that room remains for leading performers to emerge on some of these more recent ESG focal points.
Other noteworthy findings and outcomes of this year's analysis:
Normally announced at an event concurrent with the World Economic Forum in Davos, this year's Global 100 launch includes a leaders' roundtable discussion held virtually, focusing on the imperative for businesses and governments to close the "say–do" gap on climate. This event takes place today from 4 to 5pm Central European Time with opening remarks from Johan Rockström, a Swedish professor and joint director of the Potsdam Institute for Climate Impact Research, and the involvement of:
Free registration is available at https://tinyurl.com/G1002022.
A digital version of the ranking, select national scorecards, and further contextual and methodological information is available at corporateknights.com/global100.
What is the Global 100?
About Corporate Knights: Corporate Knights Inc. includes the sustainable-business magazine Corporate Knights and a research division that produces rankings and financial product ratings based on corporate sustainability performance.
Appendix I: Net returns of the MSCI ACWI and the Corporate Knights Global 100 Index in USD as calculated respectively by Solactive and S&P Capital IQ (from February 1, 2005, to December 31, 2021).
Appendix II: 2022 Global 100 Most Sustainable Corporations in the World
* Tie. †Rank 30 and 85 updated due to data correction
SOURCE Corporate Knights Inc.
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