If you were wondering about the answer to the above question, wonder no more: The Global 100 Most Sustainable Corporations in the World was unveiled last week at the World Economic Forum in Davos, the first of what is promised to be an annual tradition.
The list was the labor of two organizations -- Toronto- and New York-based Innovest Strategic Value Advisors, which has developed highly respected rating systems for companies, based on their environmental performance; and Corporate Knights Inc., a Canadian magazine focusing on corporate social responsibility. (“A Corporate Knight is a corporation that is chivalrous toward society,” according to the magazine.)
Why a “Global 100”? According to the organizers, there is a widespread audience for knowing how well -- and how good -- companies are doing, including investors, employees, company managers, government agencies, consumers, and citizen groups. Each has an interest in recognizing the most “sustainable corporations,” defined as those “that produce an overall positive impact on society and the environment" (a definition that's a little too simplistic, in my opinion).
That’s no mean feat. Determining who’s “sustainable” and who’s not requires equal parts art and science -- a combination of meaningful metrics and decidedly more subjective information -- things like interviews with companies and activist groups. And then there’s the question of “Compared to what?” -- how each company’s performance compares not just to other companies, but to what’s possible, or what’s ideal.
In the case of the Global 100, the grading was done on a curve -- that is, there would be 100 “most sustainable corporations” no matter what. Companies were compared against one another. So the question is: Was the bar was set high enough?
Unfortunately, we don’t know. The data proffered by the organizers don’t show how the companies rank relative to one another -- or any kind of scoring system, for that matter. All of the top-100 companies are listed together. Only the “Top 3” companies are singled out: Alcoa, BP, and Toyota. Even so, the organizers offer only a very brief paragraph about why each of these three companies merits special status. The entire list the 100 is available either in alphabetical order or by country.
(By the way, if you’re keeping score, the U.K. led the list, being home to 32 of the 100 corporations; the U.S. ranked second, with 20 companies. Below is the complete listing by country.)
Country Number Great Britain 32 U.S. 20 Germany 9 Sweden 7 Canada 6 Japan 5 Netherlands 5 France 4 Finland 3 Denmark 2 Spain 2 Switzerland 2 Australia 1 Belgium 1 Norway 1
But the rankings only go so far. The whole exercise raises as many questions as it answers: Were the Global 100 companies really all that much better than the next 100? Were some of the Global 100 (beyond the three companies singled out) far better than some of the others? (Should it really have been, say, a Global 63?) What about sectors -- did some of the sectors perform much better than others? Are there some that are missing altogether?
And, not insignificantly: Who paid for the tremendous amount of work behind this effort -- not to mention the special supplement that appeared last week in the International Herald Tribune? The Global 100 Web site and the press material don’t say. Was it purely a marketing effort for the two organizers' respective products and services (one sells pricey reports, including "full company reports for the companies on the Global 100"; the other sells subscriptions and advertisements)? I assume it was all aboveboard, but I’d sure like to know.
Ironic, since transparency is a core value of sustainable corporations.
The final score: The 100 Most Sustainable Corporations in the World is a laudable effort, but it will need to lift the kimono of transparency before it becomes credible among the wide range of stakeholders targeted by its organizers. I have little doubt that Innovest (which I know well) and the Corporate Knight folks (which I don’t) did a trustworthy job. But I, for one, am not satisfied to take their word on it. I -- and I suspect a lot of others -- want, and deserve, the details.