Sustainabile Development. That phrase is becoming well-worn, as politicians, movie stars and entertainers of every sort, corporate big-bigs, and most people who wish to seem progressive utter it all the time.
But what, really, does it all amount to? In the end, all that really ends up mattering is the real-world effect that we have, regardless of how noble our intentions are, or how wonderfully florid our language becomes when talking about our favorite topic, sustainable development.
For investors, consumers, and world citizens trying to make sense of it all, there is the Global 100, an annual report that is freely available at the link above, prepared by The Corporate Kinghts. The 100 companies are chosen from publicly traded stocks, both newly arrived, as well as the older contenders, from a list of over 4,000 companies ranked very highly, in terms of sustainability rating, compiled by the world’s largest sustainability research consortium, The Global Sustainability Research Alliance (GSRA), as well as on such companies’ performance on a financial stress test administered by Legg Mason.
Based on their integrated sustainability ratings from the world’s largest sustainability research consortium, The Global Sustainability Research Alliance (GSRA), and on their performance on a financial stress test administered by Legg Mason, a global asset management firm.
The second step involves percentile ranking the Global 400 sustainability top stocks using the 11 KPIs utilized by Corporate Knights Capital’s research model (data are collected by Corporate Knights Capital. These results are then screened and cerified by BLOOMBERG PROFESSIONAL® service.
The 11 proven KPIs: (from www.corporateknights.com, included in this article for reference and discussion purposes.)
Energy Productivity: Revenue per gigajoule of energy consumption. This metric, effectively measures a company’s overall efficiency. If it takes more energy to make the same amount of money, that is a less efficient scenario.
Carbon Productivity: Revenue per metric tonne of direct/indirect GHG emissions. While emmissions can be controlled, tom an extent, control systems are usually costly to purchase and maintain. Also, some businesses are inherently more carbon-heavy in terms of pollution created.
Water Productivity: Revenue per cubic meter of water withdrawal. Fresh water is a finite resource. It takes energy to filter water. Businesses that take water from a community contribute to a long-tern sustainable issue for surrounding communities.
Waste Productivity: Revenue per metric tonne of produced waste. Landfills grow each week across the North American landscape. Companies that recycle, and encourage a culture, both in the office, and in the plant, of frugality and appreciate for resources are clearly ahead.
Leadership Diversity: Percentage of women and visible minority on board of directors. Sustainability is directly connected to communities, and the effects industry and commerce has on them. As our communities and comprised of many people, of diverse ethnicities, races, and religions, it seems a more fair representation of communities to have a diverse selection of people populating the board.
Clean Capitalism Pay Link: At least one senior executive’s compensation tied to clean capitalism-themed performance targets. Having compensation directly linked to performance ensures that employees have a stake in maintaining high sustainability standards.
% Tax Paid: Percentage of reported tax obligation paid in tax. Taxes allow municipalities and national states to afford to keep their countries green. Taxes go to enforcement costs for sustainability laws, as well as research and development aimed at decreasing waste.
CEO-Average Worker Pay: How much more CEO gets paid (expressed as a multiple) compared to average worker. This is an interesting figure. How many companies pay their workers minimum wage, yet have a CEO making staggeringly higher wages? One would be shocked. This metric really says something about a company.
Safety Productivity: Revenue divided by (lost-time incidents * $1K + fatalities * $1M) Safety in the workplace should be the number one concern. A safe and orderly work environment naturally leads to more efficiency, less lost work time, and fewer insurance claims.
Innovation Capacity: Revenue per R&D dollar spent (3-year average) Without research, we would still be using polluting coal, and most innovations regarding recycling have come though decades of dedicated research. Both private and public areas, from universities to manufacturers have a role here.
Employee Turnover: Percentage of employees that voluntarily leave the company. When people stay at a place of work, there’s usually a good reason. A fair employer who takes care of its workers is what everyone on Earth is looking for.
In summary, it should be plain to see that efforts are being made by concerned parties, and there are ways to find sustainable companies to buy goods and services from, do business with, or buy stock in. As time passes, the Global 100, and other such lists, will be considered increasingly important to people in all levels of society.
(C) 2013 BCSDPortugal.Com, All Rights Reserved.