Sustainable Opportunity

Over the past decade, "sustainability" has become a popular corporate buzzword with a nebulous definition. To most people it connotes an abstract sense of do-gooding that centers on a company's effects on society and the environment. A Toronto media company called Corporate Knights has tried to make the idea clear and measurable by collecting data on 3,000 global public companies and evaluating them according to 11 different metrics. Today, as a result of that research, it published its first-ever ranking of the world's 100 most sustainable companies.

Corporate Knights' editor-in-chief Toby Heaps says that to be considered sustainable, companies must "squeeze four times more wealth out of every resource they use." Heaps announced the list at Davos, where his company is hosting a dinner for the financier George Soros.

Corporate Knights worked with a research firm to winnow down its list of publicly traded companies from 3,000 to 300, based on financial performance and other criteria. Then the Corporate Knights research group worked with two different asset management firms to evaluate those 300 companies based on 10 environmental, social and governance performance metrics, including energy productivity, waste productivity and CEO-to-average-worker pay ratio. An 11th indicator was added for "transparency."

Corporate Knights relied on the companies to give it accurate data. When a company wouldn't provide information for one of the 10 metrics, Corporate Knights assigned it a null score for that category and then penalized it with an unfavorable transparency score.

Heaps says he believes that consumers and investors will be less jaded about sustainability if companies are more transparent. "One of the things that have held back the sustainability movement on Wall Street is that on many of these issues, companies operate in a black box," he says. "You need to have transparency if you want people to take you seriously. Then you can get beyond platitudes and discuss issues that people really care about."

1. General Electric

2. Pacific Gas and Electric

3. TNT NV

4. Hennes & Mauritz

5. Nokia

6. Siemens 

7. Unilever 

10. Geberit.