The World Economic Forum has released a new global business ranking listing the world’s 100 most sustainable corporations of which several are CELB partner.

Two of the three companies singled out for excellence due to their “ability to profit from recognizing new environmental and social markets,” included CELB partners Alco and BP, plc. Several other CELB partners made the list including: Bank of America, Intel Corp, and Weyerhaeuser Co.

The top 100 companies were selected from a pool of more than 2,000 firms representing large global indices. These include the S&P 500, MSCI World, FTSE 350 and Eurostoxx, based on rankings by Innovest Strategic Value Advisors.

Transcript of First Annual Global 100 Most Sustainable Corporations in the World Launch

Thank you for coming to the launch of the first annual ranking of the Global 100 most sustainable corporations in the world.

I am joined by Shami Nissan, managing director with Innovest, Simon Zadek, CEO of AccountAbility, David Aikman, a director with the World Economic Forum, and Alain Belda, the CEO of Alcoa.

My name is Toby Heaps. I am the editor and publisher of Corporate Knights magazine, that’s Knights with a k.

For the past three years, Corporate Knights has put together a ranking called the Best 50 Corporate Citizens in Canada, which as the name suggests is limited to the Canadian geography and corporations. We publish these rankings in Corporate Knights magazine, which is circulated to a large mainstream audience in our national newspaper, the Globe and Mail.

The Global 100 Most Sustainable Corporations in the World is a step up. The first question is: Do we really need another ranking? The second question is just what are the Global 100 Most Sustainable Corporations in the World?

A company that makes the Global 100 literally means that it is part of a select group (companies whose sustainability performance falls within the top fiver percent of their sector) chosen from a universe of 2,000 of the world’s largest corporations. Of these 2,000 companies across 53 sectors, The Global 100 are sustainable in the sense that they stand the best chance of being around in 100 years because of their demonstrated performance and strategic ability to manage the triple bottom line (society, environment, and economy). To put it more frankly, the Global 100 are those large companies that are making the most progress in cutting back on the damage they do. This Global 100 is not meant to trivialize the ideal of sustainability, but instead it is meant to reinforce progress towards it.

There are esteemed lists that we know such as the Fortune 500, Forbes 500, or the FT 500, which rank companies by revenues or profits. These rankings reflect the traditional way in which corporations were viewed in 20th Century market societies. Corporations were seen almost exclusively as profit generators—their role being to make money.

Everyone here from Bono to Clinton to Blair knows that corporations have a much broader and more complex role to play than this. But on the main theme of our age, that corporations can, should, and must play an integral role in advancing society and protecting the environment, there is no global ranking that tells us who is on board.

We wanted to know, so we did it ourselves and enlisted the research services of Innovest, a globally respected research provider in this area.

The Global 100 is a 21st Century ranking to reflect a 21st Century reality that corporations have become our dominant institution. Today, the Global 100 fills a vacuum by setting out in one crisp list from a universe of over 2,000 of the world’s largest corporations, the 100 best all around global companies—the trailblazers who are potential allies in making the world a better place.

We intend the Global 100 to be a trusted simplifying mechanism that can quickly be referenced by investors looking for self-enlightened companies that plan to be around for the long haul, employees who want to work for a global company they can be proud about managers who want to benchmark their company’s sustainability performance, governments looking to attract companies that will enhance their communities, consumers wondering which global brands to buy, and citizen groups that want to know which companies they may be able to work with in meaningful ways.

So we have a broad focus, and without further ado, I'll turn it over to the chief executive officer of one of the three companies that was singled out for sustainability excellence, the chief executive officer of Alcoa, Alain Belda.

ALAIN BELDA, CEO of Alcoa Inc.:

Well, first we obviously were very honored to be chosen in this very good company of companies like Toyota and BP. Excellent companies that merit our respect for the things they do themselves. So it is good company and an honor to be listed in your Global 100.

For Alcoa, sustainability was not the name we used for several decades. It has always been our values, the things that we’ve dedicated our company to for 80 years for which sustainability, as we call it today, is a part of. And everything we do in our company has to do with passing on the baton to the next generation in a better condition than the one I have received. So all the time in the company, I'm thinking about the legacy that I'm going to leave to the next chairman of Alcoa, the legacy I received from the previous one, the obligations I have with the people that have worked in the company, and the communities in which we have operated for a long time. We have places where we've been for 100 years. We're part of the fabric, part of what makes the society in that place, live. It’s just the way we run the business.

One thing that we've started about three years ago, which I think is very symptomatic of the way which we think about this has been two programs called Action and Bravo--both of them founded by the Alcoa Foundation—require that employees contribute voluntary time to the communities in which they live, and as they do this, we support them with money from the foundation—a certain amount per hour of work—not to them, but to the effort or to the dedication of their effort.

We have in places like Latin America today 70 per cent of all employees working on voluntary projects on their own. I think that this builds society, builds a good environment, builds the community, strengthens the institutions and so we think about these things much beyond just the taxes that we pay or the jobs that we create.

TOBY HEAPS:

Thank you Alain. Next up is Shami Nissan the managing director of Innovest to elucidate the underlying methodology that was used in the selection of the Global 100.

SHAMI NISSAN, Managing Director, Innovest Strategic Value Advisors:

Innovest has 10 years experience in evaluating companies on their sustainability impacts and performance. So this is not something that we've done specifically for this exercise. It’s something that we've been doing for a long time and the reason is that we believe that performance on environmental, social, and corporate governance issues definitely impacts corporate profitability, competitiveness, and obviously feeds into shareholder value.

In terms of the methodology for the actual list, we looked at 2000 of the largest global companies covered by indices such as the MSCI World, S&P 500, EuroStoxx, and the FTSE 350 in the UK. And from those 2000, we narrowed it down to the companies that we felt were the best performing in terms of sustainability, but specifically the ones that we felt had the best strategic profit opportunities and the best ability to manage those opportunities. In other words, they were recognizing that they were offered new revenue opportunities through new areas in environmental and social markets, such as new technologies—for example fuel cells or simply shifting to more renewable sources of energy—or in the cases of pharmaceutical companies, for example, recognizing a need for a new particular type of drug or medicine in the third world and actually using both that social need and the profit making opportunity. So it was really important for us to not just look at the ones that rated the best today but to have a forward-looking element and to look at those that were capturing their opportunities going forward in the best possible way. And for that reason we narrowed it down to BP, Toyota, and Alcoa as the top-three.

TOBY HEAPS:

Next up is David Aikman, a Director of the World Economic Forum, who is going to talk about how the Global 100 fits into the agenda of the World Economic Forum to make the world a better place.

DAVID AIKMAN, World Economic Forum Director:

The theme of this annual meeting is taking responsibility for tough choices. We have leaders across the street from business, government, civil society, and academia focusing on how to mobilize effort on some of the big global challenges, all of which are too big and too complex to solve by the traditional inter-governmental processes. But when you think about it, that's the macro-level, those are the big issues that need big action, but in fact good governance and good leadership in business often starts with taking responsibility for the daily choices that your company faces such as: where in my value chain do I mitigate or tolerate risk? How do I attract the best talent and motivate my employees? How does my company interact with the communities in which we do business? What impact does my business have on the natural environment? How can I grow my company in a sustainable way?

The decisions we take on a daily basis as business leaders affect the long-term sustainability and profitability of our business. But I guess there's still a leap to take in terms of that sustainability in the capital markets.

And, in similar lines to Innovest, we just completed a study with Simon Zadek on mainstreaming responsible investment. And essentially what that study found was that although socially responsible investing has increased fourfold over the last decade, something like two trillion US dollars under management in these kind of index funds, the logic of responsible investment, namely the deliberate incorporation of societal and environmental considerations into the investment decision-making process, hasn't been really embraced by the mainstream community.

And when you think about that, that's rather odd because most of the corporations in the world now are owned by millions of individual shareholders through pension funds through mutual funds, and in fact all of those people are planning for their long term retirement and have a very long term investment horizon and yet the decisions in mainstream portfolio management are made on short-term performance indicators. We know that social and environmental factors can be quite significant drivers of long-term financial performance, particularly their impact on the environment in which businesses operate, and so it seems that we need some new performance assessment models some new strategic management tools that integrate these social and environmental factors and help the broader investment community develop an increased long-term focus on sustainable performance.

We applaud what Corporate Knights and Innovest are doing in terms of developing this list, which we see being very much in line with this trend and we hope it will become another useful tool for promoting accountability and responsibility in business.