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Puma, GlaxoSmithKline, Philips Top Sustainability Rankings
May 3, 2012
ESG research firm EIRIS ranked German sportswear brand Puma as the global leader in sustainability. British drugs company GlaxoSmithKline and the Dutch electronics company Philips also scoring highly in the annual EIRIS' Sustainability Ratings report.
The report, titled 'On track for Rio+20? How are global companies responding to sustainability?', analyzes the sustainability performance of 50 of the world's largest companies (by market cap). The highest-ranked largest companies include Novartis, the Swiss pharmaceutical group, and French group Sanofi. In contrast, some strong consumer brands, most notably Apple and Google, both received D grades.
A fifth of UK companies scored an A (the highest of five grades) based on their sustainability performance, followed by 12 percent of mainland European ones. But only 2 percent of US companies and 1 percent of Asian ones made the top grade.
“Big differences in corporate sustainability performance exist at the global and regional level. Tighter sustainability legislation in Europe and more public awareness contributes to this difference" said Mark Robertson, report author and Head of Communications at EIRIS. "Given these differences it is vital that investors use their influence as shareholders to drive improvements in sustainability performance" he added.
Top 10 Global Sustainability Leaders
1: Puma despite operating in a sector at high risk for human-rights abuses, Puma has a strong environment record and demonstrates improvements in supply chain labor standards.
2: FirstGroup derives more than 90 percent of sales from rail and bus services and the company has made major improvements in reducing its environmental impacts.
3: National Australia Bank, owner of Clydesdale and Yorkshire banks, trains staff to understand and identify environmental and social risks when doing business.
4: GlaxoSmithKline scores well across the board, demonstrating particular strengths in providing drugs cheaply to developing countries.
5: Roche, the Swiss pharmaceutical company has a strong equal-opportunities policy and operates an advanced code of ethics with strong anti-bribery rules.
6: Novartis, another Swiss pharmaceutical company, has strong environmental reporting and a good anti-bribery program.
7: Philips Electronics, the Dutch electronics company, has made significant progress on environmental issues, particularly through increasing the energy-efficiency of its products.
8: Deutsche Börse, the German stock exchange, scores highly for its strong practices in relation to environmental issues, corporate governance and stakeholder engagement.
9: Novo Nordisk, the Danish pharmaceutical company, has reduced its water use and its all-round environmental, social and governance record is strong.
10: Go-Ahead Group, the UK bus and train company, has a strong record on the environment.
... and those with room for improvement
Apple, the world's biggest company, received a D in the ratings and lags behind other tech companies. The company needs to do more to address sustainability challenges - particularly those related to supply-chain risks, the report states.
ExxonMobil, the world's second biggest company, shows poor performance in the areas of biodiversity, climate change and water management.
Toyota, the Japanese carmaker, produces greener cars, but lags behind rivals on human-rights and supply-chain-labour standards, earning it a C.
Chevron along with other major oil and gas producers, including ConocoPhillips and Occidental Petroleum, was given the lowest ranking.
Carlota Garcia-Manas, Head of Research at EIRIS said: "There are signs that companies are making sustainability a priority and acknowledging its importance, not only in terms of acting as good 'corporate citizens' but also in terms of ensuring their own long-term success. However, it's clear that companies need to do much more if they are to meet the concerns of their stakeholders and investors whilst managing the impacts of their businesses upon society and the environment in a sustainable way, both now and in the future".
Puma's parent company PPR announced this week that it plans to extend its ground breaking environmental accounting initiative to its entire portfolio of luxury and lifestyle brands.
Bart King is a PR consultant and principal at Cleantech Communications.